Correlation Between Xerox Corp and Network 1

Can any of the company-specific risk be diversified away by investing in both Xerox Corp and Network 1 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 Xerox Corp and Network 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xerox Corp and Network 1 Technologies, you can compare the effects of market volatilities on Xerox Corp and Network 1 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 Xerox Corp with a short position of Network 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xerox Corp and Network 1.

Diversification Opportunities for Xerox Corp and Network 1

-0.31

Correlation Coefficient

Xerox Corp  Network 1

Very good diversification

The 3 months correlation between Xerox and Network is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Xerox Corp and Network 1 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network 1 Technologies and Xerox Corp 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 Xerox Corp are associated (or correlated) with Network 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network 1 Technologies has no effect on the direction of Xerox Corp i.e., Xerox Corp and Network 1 go up and down completely randomly.

Pair Corralation between Xerox Corp and Network 1

Considering the 90-day investment horizon Xerox Corp is expected to under-perform the Network 1. In addition to that, Xerox Corp is 2.32 times more volatile than Network 1 Technologies. It trades about -0.1 of its total potential returns per unit of risk. Network 1 Technologies is currently generating about 0.08 per unit of volatility. If you would invest  130.00  in Network 1 Technologies on May 21, 2025 and sell it today you would earn a total of  10.00  from holding Network 1 Technologies or generate 7.69% return on investment over 90 days.

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

Xerox Corp  vs.  Network 1 Technologies

Xerox Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Xerox Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Network 1 Technologies

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Network 1 Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Network 1 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xerox Corp and Network 1

The main advantage of trading using opposite Xerox Corp and Network 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xerox Corp position performs unexpectedly, Network 1 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 Network 1 will offset losses from the drop in Network 1's long position.

The idea behind Xerox Corp and Network 1 Technologies 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.