Correlation Between XLMedia PLC and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and BE Semiconductor 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 BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and BE Semiconductor Industries, you can compare the effects of market volatilities on XLMedia PLC and BE Semiconductor 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 BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and BE Semiconductor.
Diversification Opportunities for XLMedia PLC and BE Semiconductor
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XLMedia and 0XVE is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and BE Semiconductor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Semiconductor Ind 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 BE Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Semiconductor Ind has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and BE Semiconductor go up and down completely randomly.
Pair Corralation between XLMedia PLC and BE Semiconductor
Assuming the 90 days trading horizon XLMedia PLC is expected to generate 1.09 times more return on investment than BE Semiconductor. However, XLMedia PLC is 1.09 times more volatile than BE Semiconductor Industries. It trades about 0.0 of its potential returns per unit of risk. BE Semiconductor Industries is currently generating about -0.01 per unit of risk. If you would invest 1,025 in XLMedia PLC on October 17, 2024 and sell it today you would lose (73.00) from holding XLMedia PLC or give up 7.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XLMedia PLC vs. BE Semiconductor Industries
Performance |
| Timeline |
| XLMedia PLC |
| BE Semiconductor Ind |
XLMedia PLC and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and BE Semiconductor
The main advantage of trading using opposite XLMedia PLC and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, BE Semiconductor 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 BE Semiconductor will offset losses from the drop in BE Semiconductor's long position.| XLMedia PLC vs. Cornish Metals | XLMedia PLC vs. Geely Automobile Holdings | XLMedia PLC vs. Spirent Communications plc | XLMedia PLC vs. First Class Metals |
| BE Semiconductor vs. Universal Music Group | BE Semiconductor vs. Zinc Media Group | BE Semiconductor vs. Liberty Media Corp | BE Semiconductor vs. XLMedia 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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