Correlation Between Polygiene and XMReality
Can any of the company-specific risk be diversified away by investing in both Polygiene and XMReality 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 Polygiene and XMReality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polygiene AB and XMReality AB, you can compare the effects of market volatilities on Polygiene and XMReality 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 Polygiene with a short position of XMReality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polygiene and XMReality.
Diversification Opportunities for Polygiene and XMReality
Very good diversification
The 3 months correlation between Polygiene and XMReality is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Polygiene AB and XMReality AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XMReality AB and Polygiene 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 Polygiene AB are associated (or correlated) with XMReality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XMReality AB has no effect on the direction of Polygiene i.e., Polygiene and XMReality go up and down completely randomly.
Pair Corralation between Polygiene and XMReality
Assuming the 90 days trading horizon Polygiene AB is expected to generate 0.87 times more return on investment than XMReality. However, Polygiene AB is 1.14 times less risky than XMReality. It trades about 0.19 of its potential returns per unit of risk. XMReality AB is currently generating about -0.05 per unit of risk. If you would invest 1,075 in Polygiene AB on August 30, 2024 and sell it today you would earn a total of 215.00 from holding Polygiene AB or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polygiene AB vs. XMReality AB
Performance |
| Timeline |
| Polygiene AB |
| XMReality AB |
Polygiene and XMReality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polygiene and XMReality
The main advantage of trading using opposite Polygiene and XMReality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polygiene position performs unexpectedly, XMReality 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 XMReality will offset losses from the drop in XMReality's long position.| Polygiene vs. G5 Entertainment publ | Polygiene vs. Nexam Chemical Holding | Polygiene vs. Swedencare publ AB | Polygiene vs. Genovis AB |
| XMReality vs. Lifco AB | XMReality vs. Lagercrantz Group AB | XMReality vs. Addtech AB | XMReality vs. Instalco Intressenter AB |
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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