Correlation Between Talon International and Xcel Brands
Can any of the company-specific risk be diversified away by investing in both Talon International 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 Talon International and Xcel Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talon International and Xcel Brands, you can compare the effects of market volatilities on Talon International 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 Talon International with a short position of Xcel Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talon International and Xcel Brands.
Diversification Opportunities for Talon International and Xcel Brands
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Talon and Xcel is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Talon International and Xcel Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xcel Brands and Talon International 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 Talon International 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 Talon International i.e., Talon International and Xcel Brands go up and down completely randomly.
Pair Corralation between Talon International and Xcel Brands
If you would invest 15.00 in Talon International on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Talon International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Talon International vs. Xcel Brands
Performance |
| Timeline |
| Talon International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xcel Brands |
Talon International and Xcel Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talon International and Xcel Brands
The main advantage of trading using opposite Talon International and Xcel Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talon International 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.| Talon International vs. Table Trac | Talon International vs. Seychelle Environmtl | Talon International vs. Pacific Health Care | Talon International vs. Saker Aviation Services |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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