Correlation Between XLMedia PLC and Magnora ASA
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and Magnora ASA 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 XLMedia PLC and Magnora ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Magnora ASA, you can compare the effects of market volatilities on XLMedia PLC and Magnora ASA 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 XLMedia PLC with a short position of Magnora ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Magnora ASA.
Diversification Opportunities for XLMedia PLC and Magnora ASA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XLMedia and Magnora is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Magnora ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnora ASA and XLMedia PLC 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 XLMedia PLC are associated (or correlated) with Magnora ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnora ASA has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Magnora ASA go up and down completely randomly.
Pair Corralation between XLMedia PLC and Magnora ASA
Assuming the 90 days trading horizon XLMedia PLC is expected to generate 6.26 times less return on investment than Magnora ASA. In addition to that, XLMedia PLC is 1.28 times more volatile than Magnora ASA. It trades about 0.0 of its total potential returns per unit of risk. Magnora ASA is currently generating about 0.04 per unit of volatility. If you would invest 1,857 in Magnora ASA on October 13, 2024 and sell it today you would earn a total of 813.00 from holding Magnora ASA or generate 43.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.6% |
| Values | Daily Returns |
XLMedia PLC vs. Magnora ASA
Performance |
| Timeline |
| XLMedia PLC |
| Magnora ASA |
XLMedia PLC and Magnora ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Magnora ASA
The main advantage of trading using opposite XLMedia PLC and Magnora ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, Magnora ASA 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 Magnora ASA will offset losses from the drop in Magnora ASA's long position.| XLMedia PLC vs. Porvair plc | XLMedia PLC vs. Teradata Corp | XLMedia PLC vs. Extra Space Storage | XLMedia PLC vs. Spire Healthcare Group |
| Magnora ASA vs. XLMedia PLC | Magnora ASA vs. LBG Media PLC | Magnora ASA vs. Catalyst Media Group | Magnora ASA vs. Everyman Media Group |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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