Correlation Between Gencor Industries and Xos
Can any of the company-specific risk be diversified away by investing in both Gencor Industries and Xos 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 Gencor Industries and Xos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gencor Industries and Xos Inc, you can compare the effects of market volatilities on Gencor Industries and Xos 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 Gencor Industries with a short position of Xos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gencor Industries and Xos.
Diversification Opportunities for Gencor Industries and Xos
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gencor and Xos is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gencor Industries and Xos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xos Inc and Gencor Industries 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 Gencor Industries are associated (or correlated) with Xos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xos Inc has no effect on the direction of Gencor Industries i.e., Gencor Industries and Xos go up and down completely randomly.
Pair Corralation between Gencor Industries and Xos
Given the investment horizon of 90 days Gencor Industries is expected to under-perform the Xos. But the stock apears to be less risky and, when comparing its historical volatility, Gencor Industries is 1.66 times less risky than Xos. The stock trades about -0.09 of its potential returns per unit of risk. The Xos Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 354.00 in Xos Inc on January 12, 2025 and sell it today you would lose (19.00) from holding Xos Inc or give up 5.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gencor Industries vs. Xos Inc
Performance |
| Timeline |
| Gencor Industries |
| Xos Inc |
Gencor Industries and Xos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gencor Industries and Xos
The main advantage of trading using opposite Gencor Industries and Xos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gencor Industries position performs unexpectedly, Xos 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 will offset losses from the drop in Xos' long position.| Gencor Industries vs. Alamo Group | Gencor Industries vs. Manitowoc | Gencor Industries vs. Columbus McKinnon | Gencor Industries vs. Rev Group |
| Xos vs. Nikola Corp | Xos vs. Wabash National | Xos vs. Hydrofarm Holdings Group | Xos vs. Austin Engineering Limited |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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