Correlation Between XLMedia PLC and Nokia
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and Nokia 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 Nokia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Nokia, you can compare the effects of market volatilities on XLMedia PLC and Nokia 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 Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Nokia.
Diversification Opportunities for XLMedia PLC and Nokia
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XLMedia and Nokia is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Nokia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia 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 Nokia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Nokia go up and down completely randomly.
Pair Corralation between XLMedia PLC and Nokia
Assuming the 90 days horizon XLMedia PLC is expected to generate 3.87 times more return on investment than Nokia. However, XLMedia PLC is 3.87 times more volatile than Nokia. It trades about 0.02 of its potential returns per unit of risk. Nokia is currently generating about 0.0 per unit of risk. If you would invest 17.00 in XLMedia PLC on September 5, 2024 and sell it today you would lose (3.00) from holding XLMedia PLC or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
XLMedia PLC vs. Nokia
Performance |
| Timeline |
| XLMedia PLC |
| Nokia |
XLMedia PLC and Nokia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Nokia
The main advantage of trading using opposite XLMedia PLC and Nokia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, Nokia 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 Nokia will offset losses from the drop in Nokia's long position.| XLMedia PLC vs. BlueScope Steel Limited | XLMedia PLC vs. MINCO SILVER | XLMedia PLC vs. BLUESCOPE STEEL | XLMedia PLC vs. GALENA MINING LTD |
| Nokia vs. Gladstone Investment | Nokia vs. METHODE ELECTRONICS | Nokia vs. STMICROELECTRONICS | Nokia vs. STORE ELECTRONIC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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