Correlation Between XWELL and Smart Share

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

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

Diversification Opportunities for XWELL and Smart Share

-0.16

Correlation Coefficient

XWELL  Smart Share

Good diversification

The 3 months correlation between XWELL and Smart is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding XWELL Inc and Smart Share Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Share Global and XWELL 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 XWELL Inc are associated (or correlated) with Smart Share. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Share Global has no effect on the direction of XWELL i.e., XWELL and Smart Share go up and down completely randomly.

Pair Corralation between XWELL and Smart Share

Given the investment horizon of 90 days XWELL Inc is expected to under-perform the Smart Share. In addition to that, XWELL is 1.13 times more volatile than Smart Share Global. It trades about -0.05 of its total potential returns per unit of risk. Smart Share Global is currently generating about 0.01 per unit of volatility. If you would invest  108.00  in Smart Share Global on September 3, 2024 and sell it today you would lose (35.00) from holding Smart Share Global or give up 32.41% of portfolio value over 90 days.

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

XWELL Inc  vs.  Smart Share Global

XWELL Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XWELL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental 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.

Smart Share Global

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Smart Share Global are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Smart Share displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XWELL and Smart Share

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

The idea behind XWELL Inc and Smart Share Global 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.