Correlation Between Alphabet and Xos

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

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

Diversification Opportunities for Alphabet and Xos

-0.67

Correlation Coefficient

Alphabet  Xos

Excellent diversification

The 3 months correlation between Alphabet and Xos is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Xos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xos Inc and Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and Xos go up and down completely randomly.

Pair Corralation between Alphabet and Xos

Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 0.6 times more return on investment than Xos. However, Alphabet Inc Class C is 1.66 times less risky than Xos. It trades about 0.25 of its potential returns per unit of risk. Xos Inc is currently generating about -0.02 per unit of risk. If you would invest  23,940  in Alphabet Inc Class C on September 10, 2025 and sell it today you would earn a total of  7,835  from holding Alphabet Inc Class C or generate 32.73% return on investment over 90 days.

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

Alphabet Inc Class C  vs.  Xos Inc

Alphabet Class C

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class C are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Alphabet reported solid returns over the last few months and may actually be approaching a breakup point.

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 Alphabet and Xos

The main advantage of trading using opposite Alphabet and Xos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class C 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.