Correlation Between Reworld Media and Exail Technologies
Can any of the company-specific risk be diversified away by investing in both Reworld Media and Exail Technologies 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 Reworld Media and Exail Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reworld Media and Exail Technologies SA, you can compare the effects of market volatilities on Reworld Media and Exail Technologies 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 Reworld Media with a short position of Exail Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reworld Media and Exail Technologies.
Diversification Opportunities for Reworld Media and Exail Technologies
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Reworld and Exail is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Reworld Media and Exail Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exail Technologies and Reworld Media 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 Reworld Media are associated (or correlated) with Exail Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exail Technologies has no effect on the direction of Reworld Media i.e., Reworld Media and Exail Technologies go up and down completely randomly.
Pair Corralation between Reworld Media and Exail Technologies
Assuming the 90 days trading horizon Reworld Media is expected to under-perform the Exail Technologies. In addition to that, Reworld Media is 1.65 times more volatile than Exail Technologies SA. It trades about -0.6 of its total potential returns per unit of risk. Exail Technologies SA is currently generating about 0.15 per unit of volatility. If you would invest 1,858 in Exail Technologies SA on November 5, 2024 and sell it today you would earn a total of 92.00 from holding Exail Technologies SA or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reworld Media vs. Exail Technologies SA
Performance |
| Timeline |
| Reworld Media |
| Exail Technologies |
Reworld Media and Exail Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reworld Media and Exail Technologies
The main advantage of trading using opposite Reworld Media and Exail Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reworld Media position performs unexpectedly, Exail Technologies 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 Exail Technologies will offset losses from the drop in Exail Technologies' long position.| Reworld Media vs. Hotel Majestic Cannes | Reworld Media vs. Parx Plastics NV | Reworld Media vs. Air France KLM SA | Reworld Media vs. Metalliance SA |
| Exail Technologies vs. Metalliance SA | Exail Technologies vs. Eutelsat Communications SA | Exail Technologies vs. Boiron SA | Exail Technologies vs. Hotel Majestic Cannes |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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