Correlation Between Xos and Emeren

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

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

Diversification Opportunities for Xos and Emeren

-0.74

Correlation Coefficient

Xos  Emeren

Pay attention - limited upside

The 3 months correlation between Xos and Emeren is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Xos Inc and Emeren Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emeren Group 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 Emeren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emeren Group has no effect on the direction of Xos i.e., Xos and Emeren go up and down completely randomly.

Pair Corralation between Xos and Emeren

Considering the 90-day investment horizon Xos Inc is expected to under-perform the Emeren. But the stock apears to be less risky and, when comparing its historical volatility, Xos Inc is 1.18 times less risky than Emeren. The stock trades about -0.13 of its potential returns per unit of risk. The Emeren Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  131.00  in Emeren Group on May 1, 2025 and sell it today you would earn a total of  57.00  from holding Emeren Group or generate 43.51% 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.  Emeren Group

Xos Inc

Risk-Adjusted Performance

Very Weak

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 August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Emeren Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Emeren Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Emeren disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xos and Emeren

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

The idea behind Xos Inc and Emeren Group 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.