Correlation Between ESS Tech and Xtera Communications
Can any of the company-specific risk be diversified away by investing in both ESS Tech and Xtera Communications 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 ESS Tech and Xtera Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESS Tech and Xtera Communications, you can compare the effects of market volatilities on ESS Tech and Xtera Communications 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 ESS Tech with a short position of Xtera Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESS Tech and Xtera Communications.
Diversification Opportunities for ESS Tech and Xtera Communications
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ESS and Xtera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ESS Tech and Xtera Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtera Communications and ESS Tech 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 ESS Tech are associated (or correlated) with Xtera Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtera Communications has no effect on the direction of ESS Tech i.e., ESS Tech and Xtera Communications go up and down completely randomly.
Pair Corralation between ESS Tech and Xtera Communications
If you would invest 544.00 in ESS Tech on September 2, 2025 and sell it today you would lose (269.00) from holding ESS Tech or give up 49.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESS Tech vs. Xtera Communications
Performance |
| Timeline |
| ESS Tech |
| Xtera Communications |
ESS Tech and Xtera Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESS Tech and Xtera Communications
The main advantage of trading using opposite ESS Tech and Xtera Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESS Tech position performs unexpectedly, Xtera Communications 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 Xtera Communications will offset losses from the drop in Xtera Communications' long position.| ESS Tech vs. Xtera Communications | ESS Tech vs. SmarTone Telecommunications Holdings | ESS Tech vs. Singapore Telecommunications Limited | ESS Tech vs. CITIC Telecom International |
| Xtera Communications vs. Silk Road Entertainment | Xtera Communications vs. Sun Art Retail | Xtera Communications vs. Plaza Retail REIT | Xtera Communications vs. Nexstar Broadcasting Group |
Check out your portfolio center.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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