Correlation Between Xos and Garrett Motion
Can any of the company-specific risk be diversified away by investing in both Xos and Garrett Motion 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 Xos and Garrett Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xos Inc and Garrett Motion, you can compare the effects of market volatilities on Xos and Garrett Motion 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 Xos with a short position of Garrett Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos and Garrett Motion.
Diversification Opportunities for Xos and Garrett Motion
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xos and Garrett is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Xos Inc and Garrett Motion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garrett Motion and Xos 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 Xos Inc are associated (or correlated) with Garrett Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garrett Motion has no effect on the direction of Xos i.e., Xos and Garrett Motion go up and down completely randomly.
Pair Corralation between Xos and Garrett Motion
Considering the 90-day investment horizon Xos Inc is expected to under-perform the Garrett Motion. In addition to that, Xos is 2.42 times more volatile than Garrett Motion. It trades about -0.02 of its total potential returns per unit of risk. Garrett Motion is currently generating about 0.03 per unit of volatility. If you would invest 758.00 in Garrett Motion on August 27, 2024 and sell it today you would earn a total of 73.00 from holding Garrett Motion or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xos Inc vs. Garrett Motion
Performance |
| Timeline |
| Xos Inc |
| Garrett Motion |
Xos and Garrett Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xos and Garrett Motion
The main advantage of trading using opposite Xos and Garrett Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos position performs unexpectedly, Garrett Motion 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 Garrett Motion will offset losses from the drop in Garrett Motion's long position.| Xos vs. Lion Electric Corp | Xos vs. Nikola Corp | Xos vs. Wabash National | Xos vs. Hydrofarm Holdings Group |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |