Correlation Between Xos Equity and Superior Industries

Can any of the company-specific risk be diversified away by investing in both Xos Equity and Superior Industries 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 Superior Industries 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 Superior Industries International, you can compare the effects of market volatilities on Xos Equity and Superior Industries 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 Superior Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos Equity and Superior Industries.

Diversification Opportunities for Xos Equity and Superior Industries

0.78

Correlation Coefficient

Xos Equity  Superior Industries

Poor diversification

The 3 months correlation between Xos and Superior is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Xos Equity Warrants and Superior Industries Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Industries 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 Superior Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Industries has no effect on the direction of Xos Equity i.e., Xos Equity and Superior Industries go up and down completely randomly.

Pair Corralation between Xos Equity and Superior Industries

Assuming the 90 days horizon Xos Equity Warrants is expected to under-perform the Superior Industries. In addition to that, Xos Equity is 5.16 times more volatile than Superior Industries International. It trades about -0.11 of its total potential returns per unit of risk. Superior Industries International is currently generating about -0.17 per unit of volatility. If you would invest  338.00  in Superior Industries International on August 30, 2024 and sell it today you would lose (99.00) from holding Superior Industries International or give up 29.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	85.94%
Values	Daily Returns

Xos Equity Warrants  vs.  Superior Industries Internatio

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Superior Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Industries International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Xos Equity and Superior Industries

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

The idea behind Xos Equity Warrants and Superior Industries International 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..