Correlation Between FiscalNote Holdings and Xalles Holdings

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

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

Diversification Opportunities for FiscalNote Holdings and Xalles Holdings

0.79

Correlation Coefficient

FiscalNote Holdings  Xalles Holdings

Poor diversification

The 3 months correlation between FiscalNote and Xalles is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding FiscalNote Holdings and Xalles Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xalles Holdings and FiscalNote Holdings 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 FiscalNote Holdings are associated (or correlated) with Xalles Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xalles Holdings has no effect on the direction of FiscalNote Holdings i.e., FiscalNote Holdings and Xalles Holdings go up and down completely randomly.

Pair Corralation between FiscalNote Holdings and Xalles Holdings

Given the investment horizon of 90 days FiscalNote Holdings is expected to under-perform the Xalles Holdings. But the stock apears to be less risky and, when comparing its historical volatility, FiscalNote Holdings is 2.66 times less risky than Xalles Holdings. The stock trades about -0.13 of its potential returns per unit of risk. The Xalles Holdings is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  0.09  in Xalles Holdings on September 2, 2024 and sell it today you would lose (0.04) from holding Xalles Holdings or give up 44.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

FiscalNote Holdings  vs.  Xalles Holdings

FiscalNote Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FiscalNote Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Xalles Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xalles Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with FiscalNote Holdings and Xalles Holdings

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

The idea behind FiscalNote Holdings and Xalles Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.