Correlation Between Xos and Shyft
Can any of the company-specific risk be diversified away by investing in both Xos and Shyft 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 Shyft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xos Inc and Shyft Group, you can compare the effects of market volatilities on Xos and Shyft 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 Shyft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos and Shyft.
Diversification Opportunities for Xos and Shyft
Very poor diversification
The 3 months correlation between Xos and Shyft is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Xos Inc and Shyft Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyft Group 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 Shyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyft Group has no effect on the direction of Xos i.e., Xos and Shyft go up and down completely randomly.
Pair Corralation between Xos and Shyft
Considering the 90-day investment horizon Xos Inc is expected to under-perform the Shyft. In addition to that, Xos is 1.11 times more volatile than Shyft Group. It trades about -0.08 of its total potential returns per unit of risk. Shyft Group is currently generating about 0.02 per unit of volatility. If you would invest 1,109 in Shyft Group on November 9, 2024 and sell it today you would earn a total of 82.00 from holding Shyft Group or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xos Inc vs. Shyft Group
Performance |
| Timeline |
| Xos Inc |
| Shyft Group |
Xos and Shyft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xos and Shyft
The main advantage of trading using opposite Xos and Shyft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos position performs unexpectedly, Shyft 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 Shyft will offset losses from the drop in Shyft's long position.The idea behind Xos Inc and Shyft Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Shyft vs. Astec Industries | Shyft vs. Hyster Yale Materials Handling | Shyft vs. Rev Group | Shyft vs. Lindsay |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |