Correlation Between Xurpas and Vale SA

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

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

Diversification Opportunities for Xurpas and Vale SA

0.55

Correlation Coefficient

Xurpas  Vale SA

Very weak diversification

The 3 months correlation between Xurpas and Vale is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Xurpas Inc and Vale SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vale SA ADR and Xurpas 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 Xurpas Inc are associated (or correlated) with Vale SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vale SA ADR has no effect on the direction of Xurpas i.e., Xurpas and Vale SA go up and down completely randomly.

Pair Corralation between Xurpas and Vale SA

Taking into account the 90-day investment horizon Xurpas Inc is expected to generate 2.14 times more return on investment than Vale SA. However, Xurpas is 2.14 times more volatile than Vale SA ADR. It trades about 0.25 of its potential returns per unit of risk. Vale SA ADR is currently generating about 0.07 per unit of risk. If you would invest  4,048  in Xurpas Inc on May 7, 2025 and sell it today you would earn a total of  1,436  from holding Xurpas Inc or generate 35.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	52.46%
Values	Daily Returns

Xurpas Inc  vs.  Vale SA ADR

Xurpas Inc

Risk-Adjusted Performance

Solid

Over the last 90 days Xurpas Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile basic indicators, Xurpas showed solid returns over the last few months and may actually be approaching a breakup point.

Vale SA ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vale SA ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Vale SA may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Xurpas and Vale SA

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

The idea behind Xurpas Inc and Vale SA ADR 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.