Correlation Between Xos and Dorman Products

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

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

Diversification Opportunities for Xos and Dorman Products

-0.66

Correlation Coefficient

Xos  Dorman Products

Excellent diversification

The 3 months correlation between Xos and Dorman is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Xos Inc and Dorman Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dorman Products and Xos 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 Xos Inc are associated (or correlated) with Dorman Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dorman Products has no effect on the direction of Xos i.e., Xos and Dorman Products go up and down completely randomly.

Pair Corralation between Xos and Dorman Products

Considering the 90-day investment horizon Xos Inc is expected to under-perform the Dorman Products. In addition to that, Xos is 1.72 times more volatile than Dorman Products. It trades about -0.03 of its total potential returns per unit of risk. Dorman Products is currently generating about 0.17 per unit of volatility. If you would invest  12,489  in Dorman Products on July 5, 2025 and sell it today you would earn a total of  3,164  from holding Dorman Products or generate 25.33% return on investment over 90 days.

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

Xos Inc  vs.  Dorman Products

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.

Dorman Products

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dorman Products are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dorman Products displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xos and Dorman Products

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

The idea behind Xos Inc and Dorman Products 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.