Correlation Between Xcel Brands and Universal Security
Can any of the company-specific risk be diversified away by investing in both Xcel Brands and Universal Security 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 Universal Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xcel Brands and Universal Security Instruments, you can compare the effects of market volatilities on Xcel Brands and Universal Security 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 Universal Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xcel Brands and Universal Security.
Diversification Opportunities for Xcel Brands and Universal Security
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xcel and Universal is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Xcel Brands and Universal Security Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Security 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 Universal Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Security has no effect on the direction of Xcel Brands i.e., Xcel Brands and Universal Security go up and down completely randomly.
Pair Corralation between Xcel Brands and Universal Security
Given the investment horizon of 90 days Xcel Brands is expected to generate 1.87 times more return on investment than Universal Security. However, Xcel Brands is 1.87 times more volatile than Universal Security Instruments. It trades about 0.03 of its potential returns per unit of risk. Universal Security Instruments is currently generating about 0.01 per unit of risk. If you would invest 145.00 in Xcel Brands on May 31, 2025 and sell it today you would lose (5.00) from holding Xcel Brands or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xcel Brands vs. Universal Security Instruments
Performance |
| Timeline |
| Xcel Brands |
| Universal Security |
Xcel Brands and Universal Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xcel Brands and Universal Security
The main advantage of trading using opposite Xcel Brands and Universal Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xcel Brands position performs unexpectedly, Universal Security 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 Universal Security will offset losses from the drop in Universal Security's long position.| Xcel Brands vs. G III Apparel Group | Xcel Brands vs. H M Hennes | Xcel Brands vs. Oxbridge Re Holdings | Xcel Brands vs. Oxford Industries |
| Universal Security vs. Allegion PLC | Universal Security vs. ALT5 Sigma | Universal Security vs. Evolv Technologies Holdings | Universal Security vs. Lendway |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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