Correlation Between XLMedia PLC and Seven West
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and Seven West 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 Seven West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Seven West Media, you can compare the effects of market volatilities on XLMedia PLC and Seven West 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 Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Seven West.
Diversification Opportunities for XLMedia PLC and Seven West
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XLMedia and Seven is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media 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 Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Seven West go up and down completely randomly.
Pair Corralation between XLMedia PLC and Seven West
Assuming the 90 days horizon XLMedia PLC is expected to generate 0.46 times more return on investment than Seven West. However, XLMedia PLC is 2.15 times less risky than Seven West. It trades about 0.21 of its potential returns per unit of risk. Seven West Media is currently generating about 0.0 per unit of risk. If you would invest 13.00 in XLMedia PLC on August 29, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XLMedia PLC vs. Seven West Media
Performance |
| Timeline |
| XLMedia PLC |
| Seven West Media |
XLMedia PLC and Seven West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Seven West
The main advantage of trading using opposite XLMedia PLC and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, Seven West 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 Seven West will offset losses from the drop in Seven West's long position.| XLMedia PLC vs. GREENX METALS LTD | XLMedia PLC vs. GEELY AUTOMOBILE | XLMedia PLC vs. Motorcar Parts of | XLMedia PLC vs. Perseus Mining Limited |
| Seven West vs. Superior Plus Corp | Seven West vs. NMI Holdings | Seven West vs. Origin Agritech | Seven West vs. SIVERS SEMICONDUCTORS AB |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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