Correlation Between Wizz Air and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Wizz Air 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 Wizz Air and XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and XLMedia PLC, you can compare the effects of market volatilities on Wizz Air 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 Wizz Air with a short position of XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and XLMedia PLC.
Diversification Opportunities for Wizz Air and XLMedia PLC
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wizz and XLMedia is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC and Wizz Air 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 Wizz Air 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 Wizz Air i.e., Wizz Air and XLMedia PLC go up and down completely randomly.
Pair Corralation between Wizz Air and XLMedia PLC
Assuming the 90 days trading horizon Wizz Air is expected to generate 3.31 times less return on investment than XLMedia PLC. But when comparing it to its historical volatility, Wizz Air Holdings is 1.11 times less risky than XLMedia PLC. It trades about 0.03 of its potential returns per unit of risk. XLMedia PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in XLMedia PLC on September 3, 2024 and sell it today you would earn a total of 190.00 from holding XLMedia PLC or generate 19.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. XLMedia PLC
Performance |
| Timeline |
| Wizz Air Holdings |
| XLMedia PLC |
Wizz Air and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and XLMedia PLC
The main advantage of trading using opposite Wizz Air and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air 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.| Wizz Air vs. Cornish Metals | Wizz Air vs. Hansa Investment | Wizz Air vs. Gear4music Plc | Wizz Air vs. Panther Metals PLC |
| XLMedia PLC vs. Intuitive Investments Group | XLMedia PLC vs. European Metals Holdings | XLMedia PLC vs. Athelney Trust plc | XLMedia PLC vs. Invesco Health Care |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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