Correlation Between XLMedia PLC and Mitsui Chemicals
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and Mitsui Chemicals 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 Mitsui Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Mitsui Chemicals, you can compare the effects of market volatilities on XLMedia PLC and Mitsui Chemicals 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 Mitsui Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Mitsui Chemicals.
Diversification Opportunities for XLMedia PLC and Mitsui Chemicals
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XLMedia and Mitsui is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Mitsui Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Chemicals 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 Mitsui Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui Chemicals has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Mitsui Chemicals go up and down completely randomly.
Pair Corralation between XLMedia PLC and Mitsui Chemicals
Assuming the 90 days horizon XLMedia PLC is expected to generate 3.93 times more return on investment than Mitsui Chemicals. However, XLMedia PLC is 3.93 times more volatile than Mitsui Chemicals. It trades about 0.01 of its potential returns per unit of risk. Mitsui Chemicals is currently generating about 0.01 per unit of risk. If you would invest 18.00 in XLMedia PLC on October 7, 2024 and sell it today you would lose (8.20) from holding XLMedia PLC or give up 45.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XLMedia PLC vs. Mitsui Chemicals
Performance |
| Timeline |
| XLMedia PLC |
| Mitsui Chemicals |
XLMedia PLC and Mitsui Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Mitsui Chemicals
The main advantage of trading using opposite XLMedia PLC and Mitsui Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, Mitsui Chemicals 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 Mitsui Chemicals will offset losses from the drop in Mitsui Chemicals' long position.| XLMedia PLC vs. Alphabet Class A | XLMedia PLC vs. Tencent Holdings | XLMedia PLC vs. Prosus NV | XLMedia PLC vs. Superior Plus Corp |
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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 the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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