Correlation Between Xperi Corp and Maxeon Solar

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

By analyzing existing cross correlation between Xperi Corp and Maxeon Solar Technologies, you can compare the effects of market volatilities on Xperi Corp and Maxeon Solar 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 Xperi Corp with a short position of Maxeon Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xperi Corp and Maxeon Solar.

Diversification Opportunities for Xperi Corp and Maxeon Solar

-0.47

Correlation Coefficient

Xperi Corp  Maxeon Solar

Very good diversification

The 3 months correlation between Xperi and Maxeon is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Xperi Corp and Maxeon Solar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxeon Solar Technologies and Xperi Corp 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 Xperi Corp are associated (or correlated) with Maxeon Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxeon Solar Technologies has no effect on the direction of Xperi Corp i.e., Xperi Corp and Maxeon Solar go up and down completely randomly.

Pair Corralation between Xperi Corp and Maxeon Solar

Given the investment horizon of 90 days Xperi Corp is expected to generate 0.26 times more return on investment than Maxeon Solar. However, Xperi Corp is 3.86 times less risky than Maxeon Solar. It trades about 0.02 of its potential returns per unit of risk. Maxeon Solar Technologies is currently generating about -0.08 per unit of risk. If you would invest  967.00  in Xperi Corp on September 26, 2024 and sell it today you would earn a total of  62.00  from holding Xperi Corp or generate 6.41% return on investment over 90 days.

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

Xperi Corp  vs.  Maxeon Solar Technologies

Xperi Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Xperi Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Xperi Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Maxeon Solar Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Maxeon Solar Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Maxeon Solar displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xperi Corp and Maxeon Solar

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

The idea behind Xperi Corp and Maxeon Solar Technologies 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.