Correlation Between Xeros Technology and Impax Asset

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

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

Diversification Opportunities for Xeros Technology and Impax Asset

0.67

Correlation Coefficient

Xeros Technology  Impax Asset

Poor diversification

The 3 months correlation between Xeros and Impax is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Xeros Technology Group and Impax Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Asset Management and Xeros Technology 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 Xeros Technology Group are associated (or correlated) with Impax Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Asset Management has no effect on the direction of Xeros Technology i.e., Xeros Technology and Impax Asset go up and down completely randomly.

Pair Corralation between Xeros Technology and Impax Asset

Assuming the 90 days trading horizon Xeros Technology is expected to generate 1.23 times less return on investment than Impax Asset. In addition to that, Xeros Technology is 1.67 times more volatile than Impax Asset Management. It trades about 0.14 of its total potential returns per unit of risk. Impax Asset Management is currently generating about 0.3 per unit of volatility. If you would invest  13,550  in Impax Asset Management on April 24, 2025 and sell it today you would earn a total of  7,150  from holding Impax Asset Management or generate 52.77% return on investment over 90 days.

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

Xeros Technology Group  vs.  Impax Asset Management

Xeros Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xeros Technology Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Xeros Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Impax Asset Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Impax Asset Management are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Impax Asset exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xeros Technology and Impax Asset

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

The idea behind Xeros Technology Group and Impax Asset Management 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.