Correlation Between XpresSpa and Davidstea

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

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

Diversification Opportunities for XpresSpa and Davidstea

0.0

Correlation Coefficient

XpresSpa  Davidstea

Pay attention - limited upside

The 3 months correlation between XpresSpa and Davidstea is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding XpresSpa Group and Davidstea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davidstea and XpresSpa 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 XpresSpa Group are associated (or correlated) with Davidstea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davidstea has no effect on the direction of XpresSpa i.e., XpresSpa and Davidstea go up and down completely randomly.

Pair Corralation between XpresSpa and Davidstea

If you would invest  42.00  in Davidstea on January 19, 2024 and sell it today you would earn a total of  0.00  from holding Davidstea or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

XpresSpa Group  vs.  Davidstea

XpresSpa Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XpresSpa Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, XpresSpa is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Davidstea

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Davidstea has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Davidstea is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with XpresSpa and Davidstea

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

The idea behind XpresSpa Group and Davidstea 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.