Correlation Between ORIX and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both ORIX 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 ORIX and XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORIX Corporation and XLMedia PLC, you can compare the effects of market volatilities on ORIX 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 ORIX with a short position of XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX and XLMedia PLC.
Diversification Opportunities for ORIX and XLMedia PLC
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ORIX and XLMedia is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC and ORIX 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 ORIX Corporation 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 ORIX i.e., ORIX and XLMedia PLC go up and down completely randomly.
Pair Corralation between ORIX and XLMedia PLC
Assuming the 90 days horizon ORIX is expected to generate 1.95 times less return on investment than XLMedia PLC. But when comparing it to its historical volatility, ORIX Corporation is 3.66 times less risky than XLMedia PLC. It trades about 0.05 of its potential returns per unit of risk. XLMedia PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 16.00 in XLMedia PLC on September 12, 2024 and sell it today you would lose (2.00) from holding XLMedia PLC or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORIX Corp. vs. XLMedia PLC
Performance |
| Timeline |
| ORIX |
| XLMedia PLC |
ORIX and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX and XLMedia PLC
The main advantage of trading using opposite ORIX and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX 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.| ORIX vs. XLMedia PLC | ORIX vs. PLAYTIKA HOLDING DL 01 | ORIX vs. JD SPORTS FASH | ORIX vs. Tencent Music Entertainment |
| XLMedia PLC vs. CENTURIA OFFICE REIT | XLMedia PLC vs. Safety Insurance Group | XLMedia PLC vs. Selective Insurance Group | XLMedia PLC vs. bet at home AG |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |