Correlation Between XWELL and Frontdoor
Can any of the company-specific risk be diversified away by investing in both XWELL and Frontdoor 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 XWELL and Frontdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XWELL Inc and Frontdoor, you can compare the effects of market volatilities on XWELL and Frontdoor 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 XWELL with a short position of Frontdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of XWELL and Frontdoor.
Diversification Opportunities for XWELL and Frontdoor
Excellent diversification
The 3 months correlation between XWELL and Frontdoor is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding XWELL Inc and Frontdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontdoor and XWELL 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 XWELL Inc are associated (or correlated) with Frontdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontdoor has no effect on the direction of XWELL i.e., XWELL and Frontdoor go up and down completely randomly.
Pair Corralation between XWELL and Frontdoor
Given the investment horizon of 90 days XWELL Inc is expected to under-perform the Frontdoor. In addition to that, XWELL is 1.02 times more volatile than Frontdoor. It trades about -0.37 of its total potential returns per unit of risk. Frontdoor is currently generating about 0.31 per unit of volatility. If you would invest 4,951 in Frontdoor on August 29, 2024 and sell it today you would earn a total of 912.00 from holding Frontdoor or generate 18.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XWELL Inc vs. Frontdoor
Performance |
| Timeline |
| XWELL Inc |
| Frontdoor |
XWELL and Frontdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XWELL and Frontdoor
The main advantage of trading using opposite XWELL and Frontdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XWELL position performs unexpectedly, Frontdoor 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 Frontdoor will offset losses from the drop in Frontdoor's long position.| XWELL vs. Mister Car Wash | XWELL vs. Interactive Strength Common | XWELL vs. Goodfood Market Corp | XWELL vs. Frontdoor |
| Frontdoor vs. Bright Horizons Family | Frontdoor vs. Smart Share Global | Frontdoor vs. Mister Car Wash | Frontdoor vs. Rollins |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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