Correlation Between XL Fleet and Public Service
Can any of the company-specific risk be diversified away by investing in both XL Fleet and Public Service 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 XL Fleet and Public Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XL Fleet Corp and Public Service Enterprise, you can compare the effects of market volatilities on XL Fleet and Public Service 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 XL Fleet with a short position of Public Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of XL Fleet and Public Service.
Diversification Opportunities for XL Fleet and Public Service
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XL Fleet and Public is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding XL Fleet Corp and Public Service Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Service Enterprise and XL Fleet 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 XL Fleet Corp are associated (or correlated) with Public Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Service Enterprise has no effect on the direction of XL Fleet i.e., XL Fleet and Public Service go up and down completely randomly.
Pair Corralation between XL Fleet and Public Service
If you would invest 5,645 in Public Service Enterprise on January 24, 2024 and sell it today you would earn a total of 1,026 from holding Public Service Enterprise or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 1.61% |
| Values | Daily Returns |
XL Fleet Corp vs. Public Service Enterprise
Performance |
| Timeline |
| XL Fleet Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Public Service Enterprise |
XL Fleet and Public Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XL Fleet and Public Service
The main advantage of trading using opposite XL Fleet and Public Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XL Fleet position performs unexpectedly, Public Service 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 Public Service will offset losses from the drop in Public Service's long position.The idea behind XL Fleet Corp and Public Service Enterprise 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.| Public Service vs. Alliant Energy Corp | Public Service vs. Pinnacle West Capital | Public Service vs. FirstEnergy | Public Service vs. Edison International |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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