Correlation Between Alleghany and XL Fleet
Can any of the company-specific risk be diversified away by investing in both Alleghany and XL Fleet 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 Alleghany and XL Fleet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alleghany and XL Fleet Corp, you can compare the effects of market volatilities on Alleghany and XL Fleet 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 Alleghany with a short position of XL Fleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alleghany and XL Fleet.
Diversification Opportunities for Alleghany and XL Fleet
Weak diversification
The 3 months correlation between Alleghany and XL Fleet is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Alleghany and XL Fleet Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Fleet Corp and Alleghany 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 Alleghany are associated (or correlated) with XL Fleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Fleet Corp has no effect on the direction of Alleghany i.e., Alleghany and XL Fleet go up and down completely randomly.
Pair Corralation between Alleghany and XL Fleet
If you would invest 101.00 in XL Fleet Corp on January 19, 2024 and sell it today you would earn a total of 0.00 from holding XL Fleet Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alleghany vs. XL Fleet Corp
Performance |
| Timeline |
| Alleghany |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| XL Fleet Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alleghany and XL Fleet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alleghany and XL Fleet
The main advantage of trading using opposite Alleghany and XL Fleet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alleghany position performs unexpectedly, XL Fleet 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 XL Fleet will offset losses from the drop in XL Fleet's long position.| Alleghany vs. Chester Mining | Alleghany vs. Inflection Point Acquisition | Alleghany vs. Fortress Transp Infra | Alleghany vs. Vestis |
| XL Fleet vs. John Wiley Sons | XL Fleet vs. Lincoln Educational Services | XL Fleet vs. SunOpta | XL Fleet vs. Relx PLC ADR |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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