Correlation Between SES AI and Xpel
Can any of the company-specific risk be diversified away by investing in both SES AI and Xpel 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 SES AI and Xpel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SES AI Corp and Xpel Inc, you can compare the effects of market volatilities on SES AI and Xpel 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 SES AI with a short position of Xpel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SES AI and Xpel.
Diversification Opportunities for SES AI and Xpel
Significant diversification
The 3 months correlation between SES and Xpel is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding SES AI Corp and Xpel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xpel Inc and SES AI 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 SES AI Corp are associated (or correlated) with Xpel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xpel Inc has no effect on the direction of SES AI i.e., SES AI and Xpel go up and down completely randomly.
Pair Corralation between SES AI and Xpel
Considering the 90-day investment horizon SES AI Corp is expected to under-perform the Xpel. In addition to that, SES AI is 1.25 times more volatile than Xpel Inc. It trades about -0.1 of its total potential returns per unit of risk. Xpel Inc is currently generating about 0.02 per unit of volatility. If you would invest 4,570 in Xpel Inc on August 26, 2024 and sell it today you would earn a total of 3.00 from holding Xpel Inc or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SES AI Corp vs. Xpel Inc
Performance |
| Timeline |
| SES AI Corp |
| Xpel Inc |
SES AI and Xpel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SES AI and Xpel
The main advantage of trading using opposite SES AI and Xpel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SES AI position performs unexpectedly, Xpel 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 Xpel will offset losses from the drop in Xpel's long position.| SES AI vs. Cooper Stnd | SES AI vs. Motorcar Parts of | SES AI vs. American Axle Manufacturing | SES AI vs. Stoneridge |
| Xpel vs. Dorman Products | Xpel vs. Standard Motor Products | Xpel vs. Motorcar Parts of | Xpel vs. Stoneridge |
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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