Correlation Between XLMedia PLC and ABERFORTH SMCOS
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and ABERFORTH SMCOS 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 XLMedia PLC and ABERFORTH SMCOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and ABERFORTH SMCOS TRLS 01, you can compare the effects of market volatilities on XLMedia PLC and ABERFORTH SMCOS 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 XLMedia PLC with a short position of ABERFORTH SMCOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and ABERFORTH SMCOS.
Diversification Opportunities for XLMedia PLC and ABERFORTH SMCOS
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between XLMedia and ABERFORTH is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and ABERFORTH SMCOS TRLS 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABERFORTH SMCOS TRLS and XLMedia PLC 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 XLMedia PLC are associated (or correlated) with ABERFORTH SMCOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABERFORTH SMCOS TRLS has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and ABERFORTH SMCOS go up and down completely randomly.
Pair Corralation between XLMedia PLC and ABERFORTH SMCOS
Assuming the 90 days horizon XLMedia PLC is expected to generate 1.84 times more return on investment than ABERFORTH SMCOS. However, XLMedia PLC is 1.84 times more volatile than ABERFORTH SMCOS TRLS 01. It trades about 0.21 of its potential returns per unit of risk. ABERFORTH SMCOS TRLS 01 is currently generating about -0.14 per unit of risk. If you would invest 13.00 in XLMedia PLC on September 1, 2024 and sell it today you would earn a total of 1.00 from holding XLMedia PLC or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
XLMedia PLC vs. ABERFORTH SMCOS TRLS 01
Performance |
| Timeline |
| XLMedia PLC |
| ABERFORTH SMCOS TRLS |
XLMedia PLC and ABERFORTH SMCOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and ABERFORTH SMCOS
The main advantage of trading using opposite XLMedia PLC and ABERFORTH SMCOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, ABERFORTH SMCOS 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 ABERFORTH SMCOS will offset losses from the drop in ABERFORTH SMCOS's long position.| XLMedia PLC vs. FLOW TRADERS LTD | XLMedia PLC vs. Auto Trader Group | XLMedia PLC vs. Carsales | XLMedia PLC vs. CarsalesCom |
| ABERFORTH SMCOS vs. Apple Inc | ABERFORTH SMCOS vs. Apple Inc | ABERFORTH SMCOS vs. Apple Inc | ABERFORTH SMCOS vs. Apple Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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