Correlation Between Xos and Microvast Holdings

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

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

Diversification Opportunities for Xos and Microvast Holdings

0.22

Correlation Coefficient

Xos  Microvast Holdings

Modest diversification

The 3 months correlation between Xos and Microvast is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Xos Inc and Microvast Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microvast Holdings 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 Microvast Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microvast Holdings has no effect on the direction of Xos i.e., Xos and Microvast Holdings go up and down completely randomly.

Pair Corralation between Xos and Microvast Holdings

Considering the 90-day investment horizon Xos Inc is expected to generate 0.74 times more return on investment than Microvast Holdings. However, Xos Inc is 1.36 times less risky than Microvast Holdings. It trades about -0.14 of its potential returns per unit of risk. Microvast Holdings is currently generating about -0.14 per unit of risk. If you would invest  335.00  in Xos Inc on June 10, 2025 and sell it today you would lose (101.00) from holding Xos Inc or give up 30.15% of portfolio value over 90 days.

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

Xos Inc  vs.  Microvast Holdings

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in October 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Microvast Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days Microvast Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in October 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Xos and Microvast Holdings

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

The idea behind Xos Inc and Microvast Holdings 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.