Correlation Between Reeds and Xcel Brands
Can any of the company-specific risk be diversified away by investing in both Reeds and Xcel Brands 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 Reeds and Xcel Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reeds Inc and Xcel Brands, you can compare the effects of market volatilities on Reeds and Xcel Brands 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 Reeds with a short position of Xcel Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reeds and Xcel Brands.
Diversification Opportunities for Reeds and Xcel Brands
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Reeds and Xcel is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Reeds Inc and Xcel Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xcel Brands and Reeds 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 Reeds Inc are associated (or correlated) with Xcel Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xcel Brands has no effect on the direction of Reeds i.e., Reeds and Xcel Brands go up and down completely randomly.
Pair Corralation between Reeds and Xcel Brands
If you would invest 391.00 in Reeds Inc on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Reeds Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Reeds Inc vs. Xcel Brands
Performance |
| Timeline |
| Reeds Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xcel Brands |
Reeds and Xcel Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reeds and Xcel Brands
The main advantage of trading using opposite Reeds and Xcel Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reeds position performs unexpectedly, Xcel Brands 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 Xcel Brands will offset losses from the drop in Xcel Brands' long position.| Reeds vs. Barfresh Food Group | Reeds vs. Hill Street Beverage | Reeds vs. Flow Beverage Corp | Reeds vs. Zevia Pbc |
| Xcel Brands vs. H M Hennes | Xcel Brands vs. Under Armour C | Xcel Brands vs. H M Hennes | Xcel Brands vs. Oxford Industries |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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