Correlation Between Xos Equity and Waldencast Acquisition
Can any of the company-specific risk be diversified away by investing in both Xos Equity and Waldencast Acquisition 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 Waldencast Acquisition 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 Waldencast Acquisition Corp, you can compare the effects of market volatilities on Xos Equity and Waldencast Acquisition 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 Waldencast Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos Equity and Waldencast Acquisition.
Diversification Opportunities for Xos Equity and Waldencast Acquisition
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xos and Waldencast is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Xos Equity Warrants and Waldencast Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waldencast Acquisition 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 Waldencast Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waldencast Acquisition has no effect on the direction of Xos Equity i.e., Xos Equity and Waldencast Acquisition go up and down completely randomly.
Pair Corralation between Xos Equity and Waldencast Acquisition
Assuming the 90 days horizon Xos Equity Warrants is expected to under-perform the Waldencast Acquisition. In addition to that, Xos Equity is 1.46 times more volatile than Waldencast Acquisition Corp. It trades about -0.3 of its total potential returns per unit of risk. Waldencast Acquisition Corp is currently generating about -0.03 per unit of volatility. If you would invest 14.00 in Waldencast Acquisition Corp on September 3, 2024 and sell it today you would lose (3.00) from holding Waldencast Acquisition Corp or give up 21.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xos Equity Warrants vs. Waldencast Acquisition Corp
Performance |
| Timeline |
| Xos Equity Warrants |
| Waldencast Acquisition |
Xos Equity and Waldencast Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xos Equity and Waldencast Acquisition
The main advantage of trading using opposite Xos Equity and Waldencast Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos Equity position performs unexpectedly, Waldencast Acquisition 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 Waldencast Acquisition will offset losses from the drop in Waldencast Acquisition'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 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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