Correlation Between Xcel Energy and Annovis BioInc

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Can any of the company-specific risk be diversified away by investing in both Xcel Energy and Annovis BioInc 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 Energy and Annovis BioInc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xcel Energy and Annovis BioInc, you can compare the effects of market volatilities on Xcel Energy and Annovis BioInc 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 Energy with a short position of Annovis BioInc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xcel Energy and Annovis BioInc.

Diversification Opportunities for Xcel Energy and Annovis BioInc

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Xcel Energy and Annovis is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Xcel Energy and Annovis BioInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annovis BioInc and Xcel Energy 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 Energy are associated (or correlated) with Annovis BioInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annovis BioInc has no effect on the direction of Xcel Energy i.e., Xcel Energy and Annovis BioInc go up and down completely randomly.

Pair Corralation between Xcel Energy and Annovis BioInc

Considering the 90-day investment horizon Xcel Energy is expected to generate 16.7 times less return on investment than Annovis BioInc. But when comparing it to its historical volatility, Xcel Energy is 7.09 times less risky than Annovis BioInc. It trades about 0.02 of its potential returns per unit of risk. Annovis BioInc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  615.00  in Annovis BioInc on September 9, 2022 and sell it today you would earn a total of  570.00  from holding Annovis BioInc or generate 92.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Xcel Energy  vs.  Annovis BioInc

 Performance (%) 
       Timeline  
Xcel Energy 
Xcel Energy Performance
0 of 100
Over the last 90 days Xcel Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's technical and fundamental indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Xcel Energy Price Channel

Annovis BioInc 
Annovis Performance
0 of 100
Over the last 90 days Annovis BioInc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2023. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Annovis Price Channel

Xcel Energy and Annovis BioInc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xcel Energy and Annovis BioInc

The main advantage of trading using opposite Xcel Energy and Annovis BioInc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xcel Energy position performs unexpectedly, Annovis BioInc 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 Annovis BioInc will offset losses from the drop in Annovis BioInc's long position.
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The idea behind Xcel Energy and Annovis BioInc 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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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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