Correlation Between Xeros Technology and Arrow Electronics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Xeros Technology and Arrow Electronics 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 Xeros Technology and Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xeros Technology Group and Arrow Electronics, you can compare the effects of market volatilities on Xeros Technology and Arrow Electronics 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 Xeros Technology with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xeros Technology and Arrow Electronics.

Diversification Opportunities for Xeros Technology and Arrow Electronics

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Xeros and Arrow is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Xeros Technology Group and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and Xeros Technology 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 Xeros Technology Group are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Xeros Technology i.e., Xeros Technology and Arrow Electronics go up and down completely randomly.

Pair Corralation between Xeros Technology and Arrow Electronics

Assuming the 90 days trading horizon Xeros Technology Group is expected to generate 4.79 times more return on investment than Arrow Electronics. However, Xeros Technology is 4.79 times more volatile than Arrow Electronics. It trades about 0.27 of its potential returns per unit of risk. Arrow Electronics is currently generating about 0.02 per unit of risk. If you would invest  38.00  in Xeros Technology Group on November 5, 2024 and sell it today you would earn a total of  15.00  from holding Xeros Technology Group or generate 39.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Xeros Technology Group  vs.  Arrow Electronics

 Performance 
       Timeline  
Xeros Technology 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Xeros Technology Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Xeros Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.
Arrow Electronics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Arrow Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Arrow Electronics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Xeros Technology and Arrow Electronics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xeros Technology and Arrow Electronics

The main advantage of trading using opposite Xeros Technology and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xeros Technology position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.
The idea behind Xeros Technology Group and Arrow Electronics 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.
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

Other Complementary Tools

Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum