Correlation Between K Bro and Xcel Brands

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

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

Diversification Opportunities for K Bro and Xcel Brands

-0.32

Correlation Coefficient

K Bro  Xcel Brands

Very good diversification

The 3 months correlation between KBRLF and Xcel is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding K Bro Linen and Xcel Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xcel Brands and K Bro 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 K Bro Linen are associated (or correlated) with Xcel Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xcel Brands has no effect on the direction of K Bro i.e., K Bro and Xcel Brands go up and down completely randomly.

Pair Corralation between K Bro and Xcel Brands

Assuming the 90 days horizon K Bro Linen is expected to generate 0.12 times more return on investment than Xcel Brands. However, K Bro Linen is 8.25 times less risky than Xcel Brands. It trades about -0.02 of its potential returns per unit of risk. Xcel Brands is currently generating about -0.08 per unit of risk. If you would invest  2,517  in K Bro Linen on April 29, 2025 and sell it today you would lose (13.00) from holding K Bro Linen or give up 0.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	59.68%
Values	Daily Returns

K Bro Linen  vs.  Xcel Brands

K Bro Linen

Risk-Adjusted Performance

Very Weak

Over the last 90 days K Bro Linen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, K Bro is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Xcel Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xcel Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with K Bro and Xcel Brands

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

The idea behind K Bro Linen and Xcel Brands 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.