Correlation Between Thule Group and XMReality
Can any of the company-specific risk be diversified away by investing in both Thule Group 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 Thule Group and XMReality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thule Group AB and XMReality AB, you can compare the effects of market volatilities on Thule Group 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 Thule Group with a short position of XMReality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thule Group and XMReality.
Diversification Opportunities for Thule Group and XMReality
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thule and XMReality is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Thule Group AB and XMReality AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XMReality AB and Thule Group 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 Thule Group 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 Thule Group i.e., Thule Group and XMReality go up and down completely randomly.
Pair Corralation between Thule Group and XMReality
Assuming the 90 days trading horizon Thule Group AB is expected to under-perform the XMReality. But the stock apears to be less risky and, when comparing its historical volatility, Thule Group AB is 2.36 times less risky than XMReality. The stock trades about -0.07 of its potential returns per unit of risk. The XMReality AB is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2.20 in XMReality AB on August 29, 2024 and sell it today you would lose (0.10) from holding XMReality AB or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thule Group AB vs. XMReality AB
Performance |
| Timeline |
| Thule Group AB |
| XMReality AB |
Thule Group and XMReality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thule Group and XMReality
The main advantage of trading using opposite Thule Group and XMReality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thule Group 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.| Thule Group vs. MIPS AB | Thule Group vs. NIBE Industrier AB | Thule Group vs. Dometic Group AB | Thule Group vs. Husqvarna 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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