Correlation Between Xos Equity and Momentus

Can any of the company-specific risk be diversified away by investing in both Xos Equity and Momentus 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 Equity and Momentus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xos Equity Warrants and Momentus, you can compare the effects of market volatilities on Xos Equity and Momentus 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 Equity with a short position of Momentus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos Equity and Momentus.

Diversification Opportunities for Xos Equity and Momentus

-0.36

Correlation Coefficient

Xos Equity  Momentus

Very good diversification

The 3 months correlation between Xos and Momentus is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Xos Equity Warrants and Momentus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Momentus and Xos Equity 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 Equity Warrants are associated (or correlated) with Momentus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Momentus has no effect on the direction of Xos Equity i.e., Xos Equity and Momentus go up and down completely randomly.

Pair Corralation between Xos Equity and Momentus

Assuming the 90 days horizon Xos Equity Warrants is expected to under-perform the Momentus. But the stock apears to be less risky and, when comparing its historical volatility, Xos Equity Warrants is 1.45 times less risky than Momentus. The stock trades about 0.0 of its potential returns per unit of risk. The Momentus is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1.90  in Momentus on October 10, 2024 and sell it today you would earn a total of  6.75  from holding Momentus or generate 355.26% return on investment over 90 days.

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

Xos Equity Warrants  vs.  Momentus

Xos Equity Warrants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xos Equity Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Xos Equity is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Momentus

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Momentus are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Momentus showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xos Equity and Momentus

The main advantage of trading using opposite Xos Equity and Momentus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos Equity position performs unexpectedly, Momentus 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 Momentus will offset losses from the drop in Momentus' long position.

The idea behind Xos Equity Warrants and Momentus 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.