Correlation Between XLMedia PLC and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and Austevoll Seafood 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 Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Austevoll Seafood ASA, you can compare the effects of market volatilities on XLMedia PLC and Austevoll Seafood 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 Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Austevoll Seafood.
Diversification Opportunities for XLMedia PLC and Austevoll Seafood
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between XLMedia and Austevoll is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA 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 Austevoll Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austevoll Seafood ASA has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Austevoll Seafood go up and down completely randomly.
Pair Corralation between XLMedia PLC and Austevoll Seafood
Assuming the 90 days horizon XLMedia PLC is expected to generate 1.96 times more return on investment than Austevoll Seafood. However, XLMedia PLC is 1.96 times more volatile than Austevoll Seafood ASA. It trades about 0.05 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.08 per unit of risk. If you would invest 12.00 in XLMedia PLC on August 29, 2024 and sell it today you would earn a total of 2.00 from holding XLMedia PLC or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XLMedia PLC vs. Austevoll Seafood ASA
Performance |
| Timeline |
| XLMedia PLC |
| Austevoll Seafood ASA |
XLMedia PLC and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Austevoll Seafood
The main advantage of trading using opposite XLMedia PLC and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, Austevoll Seafood 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 Austevoll Seafood will offset losses from the drop in Austevoll Seafood's long position.| XLMedia PLC vs. Alphabet Class A | XLMedia PLC vs. Alphabet Class A | XLMedia PLC vs. Alphabet | XLMedia PLC vs. Meta Platforms |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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