Correlation Between Lee Enterprises and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Lee Enterprises 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 Lee Enterprises and XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lee Enterprises Incorporated and XLMedia PLC, you can compare the effects of market volatilities on Lee Enterprises 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 Lee Enterprises with a short position of XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lee Enterprises and XLMedia PLC.
Diversification Opportunities for Lee Enterprises and XLMedia PLC
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lee and XLMedia is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lee Enterprises Incorporated and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC and Lee Enterprises 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 Lee Enterprises Incorporated 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 Lee Enterprises i.e., Lee Enterprises and XLMedia PLC go up and down completely randomly.
Pair Corralation between Lee Enterprises and XLMedia PLC
Considering the 90-day investment horizon Lee Enterprises Incorporated is expected to under-perform the XLMedia PLC. In addition to that, Lee Enterprises is 1.57 times more volatile than XLMedia PLC. It trades about 0.0 of its total potential returns per unit of risk. XLMedia PLC is currently generating about 0.01 per unit of volatility. If you would invest 15.00 in XLMedia PLC on August 27, 2024 and sell it today you would earn a total of 0.00 from holding XLMedia PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lee Enterprises Incorporated vs. XLMedia PLC
Performance |
| Timeline |
| Lee Enterprises |
| XLMedia PLC |
Lee Enterprises and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lee Enterprises and XLMedia PLC
The main advantage of trading using opposite Lee Enterprises and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lee Enterprises 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.| Lee Enterprises vs. New York Times | Lee Enterprises vs. Scholastic | Lee Enterprises vs. Pearson PLC ADR | Lee Enterprises vs. John Wiley Sons |
| XLMedia PLC vs. FP Newspapers | XLMedia PLC vs. Scholastic | XLMedia PLC vs. Lee Enterprises Incorporated | XLMedia PLC vs. John Wiley Sons |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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