Correlation Between European Metals and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both European Metals 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 European Metals and XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and XLMedia PLC, you can compare the effects of market volatilities on European Metals 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 European Metals with a short position of XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and XLMedia PLC.
Diversification Opportunities for European Metals and XLMedia PLC
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between European and XLMedia is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC and European Metals 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 European Metals Holdings 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 European Metals i.e., European Metals and XLMedia PLC go up and down completely randomly.
Pair Corralation between European Metals and XLMedia PLC
Assuming the 90 days trading horizon European Metals is expected to generate 1.67 times less return on investment than XLMedia PLC. In addition to that, European Metals is 1.89 times more volatile than XLMedia PLC. It trades about 0.1 of its total potential returns per unit of risk. XLMedia PLC is currently generating about 0.32 per unit of volatility. If you would invest 930.00 in XLMedia PLC on November 3, 2024 and sell it today you would earn a total of 135.00 from holding XLMedia PLC or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
European Metals Holdings vs. XLMedia PLC
Performance |
| Timeline |
| European Metals Holdings |
| XLMedia PLC |
European Metals and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and XLMedia PLC
The main advantage of trading using opposite European Metals and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals 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.| European Metals vs. Zoom Video Communications | European Metals vs. CNH Industrial NV | European Metals vs. GreenX Metals | European Metals vs. McEwen Mining |
| XLMedia PLC vs. Software Circle plc | XLMedia PLC vs. Global Net Lease | XLMedia PLC vs. Teradata Corp | XLMedia PLC vs. Qurate Retail Series |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |