Correlation Between XLMedia PLC and AcadeMedia
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and AcadeMedia 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 AcadeMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and AcadeMedia AB, you can compare the effects of market volatilities on XLMedia PLC and AcadeMedia 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 AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and AcadeMedia.
Diversification Opportunities for XLMedia PLC and AcadeMedia
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XLMedia and AcadeMedia is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB 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 AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and AcadeMedia go up and down completely randomly.
Pair Corralation between XLMedia PLC and AcadeMedia
Assuming the 90 days trading horizon XLMedia PLC is expected to under-perform the AcadeMedia. But the stock apears to be less risky and, when comparing its historical volatility, XLMedia PLC is 1.56 times less risky than AcadeMedia. The stock trades about -0.09 of its potential returns per unit of risk. The AcadeMedia AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,344 in AcadeMedia AB on September 12, 2024 and sell it today you would earn a total of 206.00 from holding AcadeMedia AB or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XLMedia PLC vs. AcadeMedia AB
Performance |
| Timeline |
| XLMedia PLC |
| AcadeMedia AB |
XLMedia PLC and AcadeMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and AcadeMedia
The main advantage of trading using opposite XLMedia PLC and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia's long position.| XLMedia PLC vs. Catalyst Media Group | XLMedia PLC vs. CATLIN GROUP | XLMedia PLC vs. Tamburi Investment Partners | XLMedia PLC vs. Magnora ASA |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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