Correlation Between Xplora Technologies and Clean Seas

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

By analyzing existing cross correlation between Xplora Technologies As and Clean Seas Seafood, you can compare the effects of market volatilities on Xplora Technologies and Clean Seas 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 Xplora Technologies with a short position of Clean Seas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xplora Technologies and Clean Seas.

Diversification Opportunities for Xplora Technologies and Clean Seas

-0.38

Correlation Coefficient

Xplora Technologies  Clean Seas

Very good diversification

The 3 months correlation between Xplora and Clean is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xplora Technologies As and Clean Seas Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Seas Seafood and Xplora Technologies 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 Xplora Technologies As are associated (or correlated) with Clean Seas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Seas Seafood has no effect on the direction of Xplora Technologies i.e., Xplora Technologies and Clean Seas go up and down completely randomly.

Pair Corralation between Xplora Technologies and Clean Seas

Assuming the 90 days trading horizon Xplora Technologies As is expected to under-perform the Clean Seas. But the stock apears to be less risky and, when comparing its historical volatility, Xplora Technologies As is 2.33 times less risky than Clean Seas. The stock trades about -0.06 of its potential returns per unit of risk. The Clean Seas Seafood is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  85.00  in Clean Seas Seafood on December 30, 2024 and sell it today you would earn a total of  25.00  from holding Clean Seas Seafood or generate 29.41% return on investment over 90 days.

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

Xplora Technologies As  vs.  Clean Seas Seafood

Xplora Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xplora Technologies As has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Clean Seas Seafood

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Seas Seafood are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Clean Seas disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xplora Technologies and Clean Seas

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

The idea behind Xplora Technologies As and Clean Seas Seafood 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.