Correlation Between XLMedia PLC and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and Zurich Insurance 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 Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Zurich Insurance Group, you can compare the effects of market volatilities on XLMedia PLC and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Zurich Insurance.
Diversification Opportunities for XLMedia PLC and Zurich Insurance
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between XLMedia and Zurich is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Zurich Insurance go up and down completely randomly.
Pair Corralation between XLMedia PLC and Zurich Insurance
Assuming the 90 days trading horizon XLMedia PLC is expected to generate 2.64 times more return on investment than Zurich Insurance. However, XLMedia PLC is 2.64 times more volatile than Zurich Insurance Group. It trades about 0.32 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about -0.02 per unit of risk. If you would invest 920.00 in XLMedia PLC on October 24, 2024 and sell it today you would earn a total of 130.00 from holding XLMedia PLC or generate 14.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XLMedia PLC vs. Zurich Insurance Group
Performance |
| Timeline |
| XLMedia PLC |
| Zurich Insurance |
XLMedia PLC and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Zurich Insurance
The main advantage of trading using opposite XLMedia PLC and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.| XLMedia PLC vs. Alien Metals | XLMedia PLC vs. Hochschild Mining plc | XLMedia PLC vs. Empire Metals Limited | XLMedia PLC vs. Power Metal Resources |
| Zurich Insurance vs. United Utilities Group | Zurich Insurance vs. Gaztransport et Technigaz | Zurich Insurance vs. MoneysupermarketCom Group PLC | Zurich Insurance vs. Hochschild Mining plc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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