Correlation Between Arrow Electronics and Xeros Technology
Can any of the company-specific risk be diversified away by investing in both Arrow Electronics and Xeros Technology 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 Arrow Electronics and Xeros Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Electronics and Xeros Technology Group, you can compare the effects of market volatilities on Arrow Electronics and Xeros Technology 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 Arrow Electronics with a short position of Xeros Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and Xeros Technology.
Diversification Opportunities for Arrow Electronics and Xeros Technology
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and Xeros is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and Xeros Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xeros Technology and Arrow Electronics 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 Arrow Electronics are associated (or correlated) with Xeros Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xeros Technology has no effect on the direction of Arrow Electronics i.e., Arrow Electronics and Xeros Technology go up and down completely randomly.
Pair Corralation between Arrow Electronics and Xeros Technology
Assuming the 90 days trading horizon Arrow Electronics is expected to generate 0.37 times more return on investment than Xeros Technology. However, Arrow Electronics is 2.7 times less risky than Xeros Technology. It trades about -0.01 of its potential returns per unit of risk. Xeros Technology Group is currently generating about -0.11 per unit of risk. If you would invest 12,456 in Arrow Electronics on October 26, 2024 and sell it today you would lose (581.00) from holding Arrow Electronics or give up 4.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.43% |
| Values | Daily Returns |
Arrow Electronics vs. Xeros Technology Group
Performance |
| Timeline |
| Arrow Electronics |
| Xeros Technology |
Arrow Electronics and Xeros Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and Xeros Technology
The main advantage of trading using opposite Arrow Electronics and Xeros Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics position performs unexpectedly, Xeros Technology 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 Xeros Technology will offset losses from the drop in Xeros Technology's long position.| Arrow Electronics vs. Pfeiffer Vacuum Technology | Arrow Electronics vs. MTI Wireless Edge | Arrow Electronics vs. Aptitude Software Group | Arrow Electronics vs. Allianz Technology Trust |
| Xeros Technology vs. SupplyMe Capital PLC | Xeros Technology vs. Grand Vision Media | Xeros Technology vs. Overstock | Xeros Technology vs. DG Innovate PLC |
Check out your portfolio center.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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