Correlation Between Xos and Shyft

Can any of the company-specific risk be diversified away by investing in both Xos and Shyft at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Xos and Shyft into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xos Inc and Shyft Group, you can compare the effects of market volatilities on Xos and Shyft and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Xos with a short position of Shyft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos and Shyft.

Diversification Opportunities for Xos and Shyft

0.55

Correlation Coefficient

Xos  Shyft

Very weak diversification

The 3 months correlation between Xos and Shyft is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Xos Inc and Shyft Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyft Group and Xos is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Xos Inc are associated (or correlated) with Shyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyft Group has no effect on the direction of Xos i.e., Xos and Shyft go up and down completely randomly.

Pair Corralation between Xos and Shyft

Considering the 90-day investment horizon Xos is expected to generate 1.16 times less return on investment than Shyft. But when comparing it to its historical volatility, Xos Inc is 1.21 times less risky than Shyft. It trades about 0.09 of its potential returns per unit of risk. Shyft Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,164  in Shyft Group on October 22, 2024 and sell it today you would earn a total of  78.00  from holding Shyft Group or generate 6.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Xos Inc  vs.  Shyft Group

Xos Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xos Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Shyft Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shyft Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Shyft may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Xos and Shyft

The main advantage of trading using opposite Xos and Shyft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos position performs unexpectedly, Shyft can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Shyft will offset losses from the drop in Shyft's long position.

The idea behind Xos Inc and Shyft Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.