Correlation Between XTI Aerospace, and Booz Allen

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

By analyzing existing cross correlation between XTI Aerospace, and Booz Allen Hamilton, you can compare the effects of market volatilities on XTI Aerospace, and Booz Allen 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 XTI Aerospace, with a short position of Booz Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of XTI Aerospace, and Booz Allen.

Diversification Opportunities for XTI Aerospace, and Booz Allen

-0.31

Correlation Coefficient

XTI Aerospace,  Booz Allen

Very good diversification

The 3 months correlation between XTI and Booz is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding XTI Aerospace, and Booz Allen Hamilton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booz Allen Hamilton and XTI Aerospace, 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 XTI Aerospace, are associated (or correlated) with Booz Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booz Allen Hamilton has no effect on the direction of XTI Aerospace, i.e., XTI Aerospace, and Booz Allen go up and down completely randomly.

Pair Corralation between XTI Aerospace, and Booz Allen

Given the investment horizon of 90 days XTI Aerospace, is expected to under-perform the Booz Allen. In addition to that, XTI Aerospace, is 2.81 times more volatile than Booz Allen Hamilton. It trades about -0.3 of its total potential returns per unit of risk. Booz Allen Hamilton is currently generating about -0.02 per unit of volatility. If you would invest  15,594  in Booz Allen Hamilton on September 3, 2024 and sell it today you would lose (776.00) from holding Booz Allen Hamilton or give up 4.98% of portfolio value over 90 days.

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

XTI Aerospace,  vs.  Booz Allen Hamilton

XTI Aerospace,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XTI Aerospace, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Booz Allen Hamilton

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Booz Allen Hamilton has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Booz Allen is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with XTI Aerospace, and Booz Allen

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

The idea behind XTI Aerospace, and Booz Allen Hamilton 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.