Correlation Between GlobalData PLC and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both GlobalData PLC 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 GlobalData PLC and XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalData PLC and XLMedia PLC, you can compare the effects of market volatilities on GlobalData PLC 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 GlobalData PLC with a short position of XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalData PLC and XLMedia PLC.
Diversification Opportunities for GlobalData PLC and XLMedia PLC
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlobalData and XLMedia is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData PLC and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC and GlobalData 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 GlobalData PLC 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 GlobalData PLC i.e., GlobalData PLC and XLMedia PLC go up and down completely randomly.
Pair Corralation between GlobalData PLC and XLMedia PLC
Assuming the 90 days trading horizon GlobalData PLC is expected to under-perform the XLMedia PLC. In addition to that, GlobalData PLC is 1.05 times more volatile than XLMedia PLC. It trades about -0.08 of its total potential returns per unit of risk. XLMedia PLC is currently generating about 0.36 per unit of volatility. If you would invest 914.00 in XLMedia PLC on October 30, 2024 and sell it today you would earn a total of 141.00 from holding XLMedia PLC or generate 15.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GlobalData PLC vs. XLMedia PLC
Performance |
Timeline |
GlobalData PLC |
XLMedia PLC |
GlobalData PLC and XLMedia PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GlobalData PLC and XLMedia PLC
The main advantage of trading using opposite GlobalData PLC and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalData PLC 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.GlobalData PLC vs. Viridian Therapeutics | GlobalData PLC vs. Nationwide Building Society | GlobalData PLC vs. Digital Realty Trust | GlobalData PLC vs. Dollar Tree |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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