Correlation Between Aptitude Software and Xeros Technology

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

By analyzing existing cross correlation between Aptitude Software Group and Xeros Technology Group, you can compare the effects of market volatilities on Aptitude Software and Xeros Technology 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 Aptitude Software with a short position of Xeros Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptitude Software and Xeros Technology.

Diversification Opportunities for Aptitude Software and Xeros Technology

0.71

Correlation Coefficient

Aptitude Software  Xeros Technology

Poor diversification

The 3 months correlation between Aptitude and Xeros is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aptitude Software Group and Xeros Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xeros Technology and Aptitude Software 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 Aptitude Software Group are associated (or correlated) with Xeros Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xeros Technology has no effect on the direction of Aptitude Software i.e., Aptitude Software and Xeros Technology go up and down completely randomly.

Pair Corralation between Aptitude Software and Xeros Technology

Assuming the 90 days trading horizon Aptitude Software Group is expected to generate 0.62 times more return on investment than Xeros Technology. However, Aptitude Software Group is 1.62 times less risky than Xeros Technology. It trades about 0.2 of its potential returns per unit of risk. Xeros Technology Group is currently generating about 0.06 per unit of risk. If you would invest  27,156  in Aptitude Software Group on April 6, 2025 and sell it today you would earn a total of  5,544  from holding Aptitude Software Group or generate 20.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.73%
Values	Daily Returns

Aptitude Software Group  vs.  Xeros Technology Group

Aptitude Software

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptitude Software Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Aptitude Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Xeros Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xeros Technology Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Xeros Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptitude Software and Xeros Technology

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

The idea behind Aptitude Software Group and Xeros Technology 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 Transaction History module to view history of all your transactions and understand their impact on performance.