Correlation Between Fractyl Health and Xylo Technologies

Can any of the company-specific risk be diversified away by investing in both Fractyl Health and Xylo Technologies 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 Fractyl Health and Xylo Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fractyl Health Common and Xylo Technologies, you can compare the effects of market volatilities on Fractyl Health and Xylo Technologies 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 Fractyl Health with a short position of Xylo Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fractyl Health and Xylo Technologies.

Diversification Opportunities for Fractyl Health and Xylo Technologies

0.58

Correlation Coefficient

Fractyl Health  Xylo Technologies

Very weak diversification

The 3 months correlation between Fractyl and Xylo is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fractyl Health Common and Xylo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xylo Technologies and Fractyl Health 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 Fractyl Health Common are associated (or correlated) with Xylo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xylo Technologies has no effect on the direction of Fractyl Health i.e., Fractyl Health and Xylo Technologies go up and down completely randomly.

Pair Corralation between Fractyl Health and Xylo Technologies

Given the investment horizon of 90 days Fractyl Health Common is expected to under-perform the Xylo Technologies. In addition to that, Fractyl Health is 1.28 times more volatile than Xylo Technologies. It trades about -0.18 of its total potential returns per unit of risk. Xylo Technologies is currently generating about -0.05 per unit of volatility. If you would invest  939.00  in Xylo Technologies on March 31, 2024 and sell it today you would lose (759.00) from holding Xylo Technologies or give up 80.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	20.77%
Values	Daily Returns

Fractyl Health Common  vs.  Xylo Technologies

Fractyl Health Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fractyl Health Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Xylo Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xylo Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Fractyl Health and Xylo Technologies

The main advantage of trading using opposite Fractyl Health and Xylo Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fractyl Health position performs unexpectedly, Xylo Technologies 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 Xylo Technologies will offset losses from the drop in Xylo Technologies' long position.

The idea behind Fractyl Health Common and Xylo Technologies 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.

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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.