Correlation Between Xos Equity and ReNew Energy
Can any of the company-specific risk be diversified away by investing in both Xos Equity and ReNew Energy 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 Equity and ReNew Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xos Equity Warrants and ReNew Energy Global, you can compare the effects of market volatilities on Xos Equity and ReNew Energy 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 Equity with a short position of ReNew Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos Equity and ReNew Energy.
Diversification Opportunities for Xos Equity and ReNew Energy
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xos and ReNew is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Xos Equity Warrants and ReNew Energy Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReNew Energy Global and Xos Equity 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 Equity Warrants are associated (or correlated) with ReNew Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReNew Energy Global has no effect on the direction of Xos Equity i.e., Xos Equity and ReNew Energy go up and down completely randomly.
Pair Corralation between Xos Equity and ReNew Energy
Assuming the 90 days horizon Xos Equity Warrants is expected to under-perform the ReNew Energy. In addition to that, Xos Equity is 1.12 times more volatile than ReNew Energy Global. It trades about -0.23 of its total potential returns per unit of risk. ReNew Energy Global is currently generating about 0.12 per unit of volatility. If you would invest 25.00 in ReNew Energy Global on August 30, 2024 and sell it today you would earn a total of 4.00 from holding ReNew Energy Global or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xos Equity Warrants vs. ReNew Energy Global
Performance |
| Timeline |
| Xos Equity Warrants |
| ReNew Energy Global |
Xos Equity and ReNew Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xos Equity and ReNew Energy
The main advantage of trading using opposite Xos Equity and ReNew Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos Equity position performs unexpectedly, ReNew Energy 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 ReNew Energy will offset losses from the drop in ReNew Energy's long position.| Xos Equity vs. Microvast Holdings | Xos Equity vs. EVgo Equity Warrants | Xos Equity vs. Faraday Future Intelligent | Xos Equity vs. Xos Inc |
| ReNew Energy vs. Renew Energy Global | ReNew Energy vs. Xos Equity Warrants | ReNew Energy vs. Microvast Holdings | ReNew Energy vs. AEye Inc |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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