Correlation Between Xcel Brands and Medirom Healthcare
Can any of the company-specific risk be diversified away by investing in both Xcel Brands and Medirom Healthcare 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 Xcel Brands and Medirom Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xcel Brands and Medirom Healthcare Technologies, you can compare the effects of market volatilities on Xcel Brands and Medirom Healthcare 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 Xcel Brands with a short position of Medirom Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xcel Brands and Medirom Healthcare.
Diversification Opportunities for Xcel Brands and Medirom Healthcare
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xcel and Medirom is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Xcel Brands and Medirom Healthcare Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medirom Healthcare and Xcel Brands 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 Xcel Brands are associated (or correlated) with Medirom Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medirom Healthcare has no effect on the direction of Xcel Brands i.e., Xcel Brands and Medirom Healthcare go up and down completely randomly.
Pair Corralation between Xcel Brands and Medirom Healthcare
Given the investment horizon of 90 days Xcel Brands is expected to under-perform the Medirom Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Xcel Brands is 2.03 times less risky than Medirom Healthcare. The stock trades about -0.03 of its potential returns per unit of risk. The Medirom Healthcare Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 498.00 in Medirom Healthcare Technologies on August 3, 2025 and sell it today you would lose (292.00) from holding Medirom Healthcare Technologies or give up 58.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xcel Brands vs. Medirom Healthcare Technologie
Performance |
| Timeline |
| Xcel Brands |
| Medirom Healthcare |
Xcel Brands and Medirom Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xcel Brands and Medirom Healthcare
The main advantage of trading using opposite Xcel Brands and Medirom Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xcel Brands position performs unexpectedly, Medirom Healthcare 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 Medirom Healthcare will offset losses from the drop in Medirom Healthcare's long position.| Xcel Brands vs. Fly E Group, Common | Xcel Brands vs. Workhorse Group | Xcel Brands vs. Cenntro Electric Group | Xcel Brands vs. Yunji Inc |
| Medirom Healthcare vs. YY Group Holding | Medirom Healthcare vs. Bt Brands | Medirom Healthcare vs. DSS Inc | Medirom Healthcare vs. Aterian |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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