Correlation Between Dollar Tree and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Dollar Tree 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 Dollar Tree and XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar Tree and XLMedia PLC, you can compare the effects of market volatilities on Dollar Tree 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 Dollar Tree with a short position of XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar Tree and XLMedia PLC.
Diversification Opportunities for Dollar Tree and XLMedia PLC
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dollar and XLMedia is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dollar Tree and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC and Dollar Tree 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 Dollar Tree 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 Dollar Tree i.e., Dollar Tree and XLMedia PLC go up and down completely randomly.
Pair Corralation between Dollar Tree and XLMedia PLC
Assuming the 90 days trading horizon Dollar Tree is expected to under-perform the XLMedia PLC. But the stock apears to be less risky and, when comparing its historical volatility, Dollar Tree is 2.56 times less risky than XLMedia PLC. The stock trades about -0.07 of its potential returns per unit of risk. The XLMedia PLC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 720.00 in XLMedia PLC on November 3, 2024 and sell it today you would earn a total of 345.00 from holding XLMedia PLC or generate 47.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
Dollar Tree vs. XLMedia PLC
Performance |
| Timeline |
| Dollar Tree |
| XLMedia PLC |
Dollar Tree and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar Tree and XLMedia PLC
The main advantage of trading using opposite Dollar Tree and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar Tree 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.| Dollar Tree vs. JD Sports Fashion | Dollar Tree vs. AMG Advanced Metallurgical | Dollar Tree vs. Zurich Insurance Group | Dollar Tree vs. Golden Metal Resources |
| XLMedia PLC vs. UNIQA Insurance Group | XLMedia PLC vs. BE Semiconductor Industries | XLMedia PLC vs. Europa Metals | XLMedia PLC vs. Spirent Communications plc |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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