Correlation Between Exela Technologies and Xylo Technologies

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

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

Diversification Opportunities for Exela Technologies and Xylo Technologies

0.55

Correlation Coefficient

Exela Technologies  Xylo Technologies

Very weak diversification

The 3 months correlation between Exela and Xylo is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies Preferred and Xylo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xylo Technologies and Exela Technologies 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 Exela Technologies Preferred 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 Exela Technologies i.e., Exela Technologies and Xylo Technologies go up and down completely randomly.

Pair Corralation between Exela Technologies and Xylo Technologies

Assuming the 90 days horizon Exela Technologies Preferred is expected to generate 0.79 times more return on investment than Xylo Technologies. However, Exela Technologies Preferred is 1.26 times less risky than Xylo Technologies. It trades about -0.03 of its potential returns per unit of risk. Xylo Technologies is currently generating about -0.07 per unit of risk. If you would invest  203.00  in Exela Technologies Preferred on March 31, 2024 and sell it today you would lose (33.00) from holding Exela Technologies Preferred or give up 16.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Exela Technologies Preferred  vs.  Xylo Technologies

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Preferred Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail 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 Exela Technologies and Xylo Technologies

The main advantage of trading using opposite Exela Technologies and Xylo Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exela Technologies 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 Exela Technologies Preferred 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.