Correlation Between Xpel and Superior Industries
Can any of the company-specific risk be diversified away by investing in both Xpel and Superior Industries 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 Superior Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xpel Inc and Superior Industries International, you can compare the effects of market volatilities on Xpel and Superior Industries 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 Superior Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xpel and Superior Industries.
Diversification Opportunities for Xpel and Superior Industries
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xpel and Superior is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Xpel Inc and Superior Industries Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Industries 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 Superior Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Industries has no effect on the direction of Xpel i.e., Xpel and Superior Industries go up and down completely randomly.
Pair Corralation between Xpel and Superior Industries
Given the investment horizon of 90 days Xpel Inc is expected to generate 0.82 times more return on investment than Superior Industries. However, Xpel Inc is 1.22 times less risky than Superior Industries. It trades about 0.21 of its potential returns per unit of risk. Superior Industries International is currently generating about -0.24 per unit of risk. If you would invest 4,036 in Xpel Inc on August 23, 2024 and sell it today you would earn a total of 449.00 from holding Xpel Inc or generate 11.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xpel Inc vs. Superior Industries Internatio
Performance |
| Timeline |
| Xpel Inc |
| Superior Industries |
Xpel and Superior Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xpel and Superior Industries
The main advantage of trading using opposite Xpel and Superior Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xpel position performs unexpectedly, Superior Industries 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 Superior Industries will offset losses from the drop in Superior Industries' long position.| Xpel vs. Dorman Products | Xpel vs. Standard Motor Products | Xpel vs. Motorcar Parts of | Xpel vs. Stoneridge |
| Superior Industries vs. Monro Muffler Brake | Superior Industries vs. Dorman Products | Superior Industries vs. Motorcar Parts of | Superior Industries vs. Gentherm |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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