Correlation Between XS Financial and Nelnet

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

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

Diversification Opportunities for XS Financial and Nelnet

0.0

Correlation Coefficient

XS Financial  Nelnet

Pay attention - limited upside

The 3 months correlation between XSHLF and Nelnet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding XS Financial and Nelnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nelnet Inc and XS Financial 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 XS Financial are associated (or correlated) with Nelnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nelnet Inc has no effect on the direction of XS Financial i.e., XS Financial and Nelnet go up and down completely randomly.

Pair Corralation between XS Financial and Nelnet

If you would invest  10,634  in Nelnet Inc on December 25, 2024 and sell it today you would earn a total of  755.00  from holding Nelnet Inc or generate 7.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

XS Financial  vs.  Nelnet Inc

XS Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days XS Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, XS Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nelnet Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nelnet Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Nelnet may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with XS Financial and Nelnet

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

The idea behind XS Financial and Nelnet Inc 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.