Correlation Between Analog Devices and XPLR Infrastructure

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

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

Diversification Opportunities for Analog Devices and XPLR Infrastructure

0.28

Correlation Coefficient

Analog Devices  XPLR Infrastructure

Modest diversification

The 3 months correlation between Analog and XPLR is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and XPLR Infrastructure LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XPLR Infrastructure and Analog Devices 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 Analog Devices are associated (or correlated) with XPLR Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XPLR Infrastructure has no effect on the direction of Analog Devices i.e., Analog Devices and XPLR Infrastructure go up and down completely randomly.

Pair Corralation between Analog Devices and XPLR Infrastructure

Considering the 90-day investment horizon Analog Devices is expected to generate 1.27 times less return on investment than XPLR Infrastructure. But when comparing it to its historical volatility, Analog Devices is 2.15 times less risky than XPLR Infrastructure. It trades about 0.18 of its potential returns per unit of risk. XPLR Infrastructure LP is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  845.00  in XPLR Infrastructure LP on May 28, 2025 and sell it today you would earn a total of  180.00  from holding XPLR Infrastructure LP or generate 21.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Analog Devices  vs.  XPLR Infrastructure LP

Analog Devices

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental indicators, Analog Devices demonstrated solid returns over the last few months and may actually be approaching a breakup point.

XPLR Infrastructure

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in XPLR Infrastructure LP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent technical and fundamental indicators, XPLR Infrastructure reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analog Devices and XPLR Infrastructure

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

The idea behind Analog Devices and XPLR Infrastructure LP 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.