Correlation Between XBP Europe and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both XBP Europe and Arrow Electronics 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 XBP Europe and Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XBP Europe Holdings and Arrow Electronics, you can compare the effects of market volatilities on XBP Europe and Arrow Electronics 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 XBP Europe with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of XBP Europe and Arrow Electronics.
Diversification Opportunities for XBP Europe and Arrow Electronics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between XBP and Arrow is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding XBP Europe Holdings and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and XBP Europe 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 XBP Europe Holdings are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of XBP Europe i.e., XBP Europe and Arrow Electronics go up and down completely randomly.
Pair Corralation between XBP Europe and Arrow Electronics
Considering the 90-day investment horizon XBP Europe Holdings is expected to generate 3.58 times more return on investment than Arrow Electronics. However, XBP Europe is 3.58 times more volatile than Arrow Electronics. It trades about 0.13 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.2 per unit of risk. If you would invest 110.00 in XBP Europe Holdings on November 18, 2024 and sell it today you would earn a total of 14.00 from holding XBP Europe Holdings or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XBP Europe Holdings vs. Arrow Electronics
Performance |
| Timeline |
| XBP Europe Holdings |
| Arrow Electronics |
XBP Europe and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XBP Europe and Arrow Electronics
The main advantage of trading using opposite XBP Europe and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XBP Europe position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| XBP Europe vs. Addus HomeCare | XBP Europe vs. Franklin Street Properties | XBP Europe vs. Simpson Manufacturing | XBP Europe vs. Acm Research |
| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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