Correlation Between Alamo and Xos

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

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

Diversification Opportunities for Alamo and Xos

0.39

Correlation Coefficient

Alamo  Xos

Weak diversification

The 3 months correlation between Alamo and Xos is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Alamo Group and Xos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xos Inc and Alamo 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 Alamo Group are associated (or correlated) with Xos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xos Inc has no effect on the direction of Alamo i.e., Alamo and Xos go up and down completely randomly.

Pair Corralation between Alamo and Xos

Considering the 90-day investment horizon Alamo Group is expected to under-perform the Xos. But the stock apears to be less risky and, when comparing its historical volatility, Alamo Group is 2.66 times less risky than Xos. The stock trades about -0.26 of its potential returns per unit of risk. The Xos Inc is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  300.00  in Xos Inc on August 3, 2025 and sell it today you would lose (28.00) from holding Xos Inc or give up 9.33% of portfolio value over 90 days.

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

Alamo Group  vs.  Xos Inc

Alamo Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Alamo Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Xos Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Xos Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Xos is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Alamo and Xos

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

The idea behind Alamo Group and Xos Inc 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.