Correlation Between Autoliv and Xos Equity
Can any of the company-specific risk be diversified away by investing in both Autoliv and Xos Equity 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 Autoliv and Xos Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autoliv and Xos Equity Warrants, you can compare the effects of market volatilities on Autoliv and Xos Equity 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 Autoliv with a short position of Xos Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autoliv and Xos Equity.
Diversification Opportunities for Autoliv and Xos Equity
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Autoliv and Xos is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Autoliv and Xos Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xos Equity Warrants and Autoliv 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 Autoliv are associated (or correlated) with Xos Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xos Equity Warrants has no effect on the direction of Autoliv i.e., Autoliv and Xos Equity go up and down completely randomly.
Pair Corralation between Autoliv and Xos Equity
Considering the 90-day investment horizon Autoliv is expected to generate 144.15 times less return on investment than Xos Equity. But when comparing it to its historical volatility, Autoliv is 51.84 times less risky than Xos Equity. It trades about 0.03 of its potential returns per unit of risk. Xos Equity Warrants is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3.40 in Xos Equity Warrants on August 25, 2024 and sell it today you would lose (2.57) from holding Xos Equity Warrants or give up 75.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.99% |
| Values | Daily Returns |
Autoliv vs. Xos Equity Warrants
Performance |
| Timeline |
| Autoliv |
| Xos Equity Warrants |
Autoliv and Xos Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autoliv and Xos Equity
The main advantage of trading using opposite Autoliv and Xos Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autoliv position performs unexpectedly, Xos Equity 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 Xos Equity will offset losses from the drop in Xos Equity's long position.| Autoliv vs. Fox Factory Holding | Autoliv vs. LKQ Corporation | Autoliv vs. Stoneridge | Autoliv vs. American Axle Manufacturing |
| Xos Equity vs. Fox Factory Holding | Xos Equity vs. LKQ Corporation | Xos Equity vs. Stoneridge | Xos Equity vs. American Axle Manufacturing |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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