Correlation Between Two Hands and Xalles Holdings

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

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

Diversification Opportunities for Two Hands and Xalles Holdings

0.07

Correlation Coefficient

Two Hands  Xalles Holdings

Significant diversification

The 3 months correlation between Two and Xalles is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Two Hands Corp and Xalles Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xalles Holdings and Two Hands 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 Two Hands Corp 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 Two Hands i.e., Two Hands and Xalles Holdings go up and down completely randomly.

Pair Corralation between Two Hands and Xalles Holdings

Given the investment horizon of 90 days Two Hands Corp is expected to generate 34.57 times more return on investment than Xalles Holdings. However, Two Hands is 34.57 times more volatile than Xalles Holdings. It trades about 0.33 of its potential returns per unit of risk. Xalles Holdings is currently generating about -0.04 per unit of risk. If you would invest  0.01  in Two Hands Corp on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Two Hands Corp or generate 0.0% return on investment over 90 days.

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

Two Hands Corp  vs.  Xalles Holdings

Two Hands Corp

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Two Hands Corp are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Two Hands demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 Two Hands and Xalles Holdings

The main advantage of trading using opposite Two Hands and Xalles Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Two Hands 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 Two Hands Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.