Correlation Between Leroy Seafood and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Leroy Seafood and XLMedia PLC 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 Leroy Seafood and XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leroy Seafood Group and XLMedia PLC, you can compare the effects of market volatilities on Leroy Seafood and XLMedia PLC 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 Leroy Seafood with a short position of XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leroy Seafood and XLMedia PLC.
Diversification Opportunities for Leroy Seafood and XLMedia PLC
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leroy and XLMedia is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Leroy Seafood Group and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC and Leroy Seafood 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 Leroy Seafood Group are associated (or correlated) with XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Leroy Seafood i.e., Leroy Seafood and XLMedia PLC go up and down completely randomly.
Pair Corralation between Leroy Seafood and XLMedia PLC
Assuming the 90 days trading horizon Leroy Seafood Group is expected to generate 0.36 times more return on investment than XLMedia PLC. However, Leroy Seafood Group is 2.76 times less risky than XLMedia PLC. It trades about 0.07 of its potential returns per unit of risk. XLMedia PLC is currently generating about -0.05 per unit of risk. If you would invest 5,178 in Leroy Seafood Group on October 30, 2024 and sell it today you would earn a total of 180.00 from holding Leroy Seafood Group or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leroy Seafood Group vs. XLMedia PLC
Performance |
| Timeline |
| Leroy Seafood Group |
| XLMedia PLC |
Leroy Seafood and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leroy Seafood and XLMedia PLC
The main advantage of trading using opposite Leroy Seafood and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leroy Seafood position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Leroy Seafood vs. Berkshire Hathaway | Leroy Seafood vs. Samsung Electronics Co | Leroy Seafood vs. Samsung Electronics Co | Leroy Seafood vs. Chocoladefabriken Lindt Spruengli |
| XLMedia PLC vs. Livermore Investments Group | XLMedia PLC vs. Mobius Investment Trust | XLMedia PLC vs. Lindsell Train Investment | XLMedia PLC vs. FC Investment Trust |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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