Correlation Between Xpel and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Xpel and Dow Jones 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 Xpel and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xpel Inc and Dow Jones Industrial, you can compare the effects of market volatilities on Xpel and Dow Jones 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 Xpel with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xpel and Dow Jones.
Diversification Opportunities for Xpel and Dow Jones
Poor diversification
The 3 months correlation between Xpel and Dow is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Xpel Inc and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Xpel 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 Xpel Inc are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Xpel i.e., Xpel and Dow Jones go up and down completely randomly.
Pair Corralation between Xpel and Dow Jones
Given the investment horizon of 90 days Xpel Inc is expected to generate 2.96 times more return on investment than Dow Jones. However, Xpel is 2.96 times more volatile than Dow Jones Industrial. It trades about 0.21 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.33 per unit of risk. If you would invest 3,897 in Xpel Inc on November 3, 2024 and sell it today you would earn a total of 375.00 from holding Xpel Inc or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xpel Inc vs. Dow Jones Industrial
Performance |
| Timeline |
Xpel and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Xpel Inc
Pair trading matchups for Xpel
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Xpel and Dow Jones
The main advantage of trading using opposite Xpel and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xpel position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Xpel vs. Dorman Products | Xpel vs. Standard Motor Products | Xpel vs. Motorcar Parts of | Xpel vs. Stoneridge |
| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
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 CEOs Directory module to screen CEOs from public companies around the world.
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