Correlation Between XLMedia PLC and BW Offshore
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and BW Offshore 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 BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and BW Offshore, you can compare the effects of market volatilities on XLMedia PLC and BW Offshore 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 BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and BW Offshore.
Diversification Opportunities for XLMedia PLC and BW Offshore
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XLMedia and 0RKH is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and BW Offshore go up and down completely randomly.
Pair Corralation between XLMedia PLC and BW Offshore
Assuming the 90 days trading horizon XLMedia PLC is expected to generate 1.07 times more return on investment than BW Offshore. However, XLMedia PLC is 1.07 times more volatile than BW Offshore. It trades about 0.32 of its potential returns per unit of risk. BW Offshore is currently generating about 0.24 per unit of risk. If you would invest 920.00 in XLMedia PLC on October 23, 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 | 94.74% |
| Values | Daily Returns |
XLMedia PLC vs. BW Offshore
Performance |
| Timeline |
| XLMedia PLC |
| BW Offshore |
XLMedia PLC and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and BW Offshore
The main advantage of trading using opposite XLMedia PLC and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's long position.| XLMedia PLC vs. Quadrise Plc | XLMedia PLC vs. ImmuPharma PLC | XLMedia PLC vs. Intuitive Investments Group | XLMedia PLC vs. European Metals Holdings |
| BW Offshore vs. Chrysalis Investments | BW Offshore vs. Herald Investment Trust | BW Offshore vs. Caledonia Investments | BW Offshore vs. Seraphim Space Investment |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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