Correlation Between AES and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both AES and XLMedia PLC 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 AES and XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The AES and XLMedia PLC, you can compare the effects of market volatilities on AES and XLMedia PLC 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 AES with a short position of XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES and XLMedia PLC.
Diversification Opportunities for AES and XLMedia PLC
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AES and XLMedia is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding The AES and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC and AES 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 The AES are associated (or correlated) with XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of AES i.e., AES and XLMedia PLC go up and down completely randomly.
Pair Corralation between AES and XLMedia PLC
Assuming the 90 days trading horizon The AES is expected to under-perform the XLMedia PLC. But the stock apears to be less risky and, when comparing its historical volatility, The AES is 1.19 times less risky than XLMedia PLC. The stock trades about -0.09 of its potential returns per unit of risk. The XLMedia PLC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 11.00 in XLMedia PLC on September 3, 2024 and sell it today you would earn a total of 3.00 from holding XLMedia PLC or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The AES vs. XLMedia PLC
Performance |
| Timeline |
| AES |
| XLMedia PLC |
AES and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AES and XLMedia PLC
The main advantage of trading using opposite AES and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| AES vs. XLMedia PLC | AES vs. PARKEN Sport Entertainment | AES vs. HANOVER INSURANCE | AES vs. Safety Insurance Group |
| XLMedia PLC vs. Nucletron Electronic Aktiengesellschaft | XLMedia PLC vs. JD SPORTS FASH | XLMedia PLC vs. AOI Electronics Co | XLMedia PLC vs. Universal Display |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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