Correlation Between Stoneridge and Xpel
Can any of the company-specific risk be diversified away by investing in both Stoneridge 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 Stoneridge and Xpel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoneridge and Xpel Inc, you can compare the effects of market volatilities on Stoneridge 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 Stoneridge with a short position of Xpel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoneridge and Xpel.
Diversification Opportunities for Stoneridge and Xpel
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stoneridge and Xpel is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Stoneridge and Xpel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xpel Inc and Stoneridge 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 Stoneridge 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 Stoneridge i.e., Stoneridge and Xpel go up and down completely randomly.
Pair Corralation between Stoneridge and Xpel
Considering the 90-day investment horizon Stoneridge is expected to under-perform the Xpel. But the stock apears to be less risky and, when comparing its historical volatility, Stoneridge is 1.32 times less risky than Xpel. The stock trades about -0.18 of its potential returns per unit of risk. The Xpel Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,787 in Xpel Inc on August 24, 2024 and sell it today you would earn a total of 698.00 from holding Xpel Inc or generate 18.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Stoneridge vs. Xpel Inc
Performance |
| Timeline |
| Stoneridge |
| Xpel Inc |
Stoneridge and Xpel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stoneridge and Xpel
The main advantage of trading using opposite Stoneridge and Xpel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoneridge 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.| Stoneridge vs. Monro Muffler Brake | Stoneridge vs. Motorcar Parts of | Stoneridge vs. Standard Motor Products | Stoneridge vs. Douglas Dynamics |
| 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 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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