Correlation Between XLMedia PLC and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and Caledonia Mining 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 Caledonia Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Caledonia Mining, you can compare the effects of market volatilities on XLMedia PLC and Caledonia Mining 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 Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Caledonia Mining.
Diversification Opportunities for XLMedia PLC and Caledonia Mining
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between XLMedia and Caledonia is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining 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 Caledonia Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Mining has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Caledonia Mining go up and down completely randomly.
Pair Corralation between XLMedia PLC and Caledonia Mining
Assuming the 90 days trading horizon XLMedia PLC is expected to generate 1.54 times more return on investment than Caledonia Mining. However, XLMedia PLC is 1.54 times more volatile than Caledonia Mining. It trades about 0.09 of its potential returns per unit of risk. Caledonia Mining is currently generating about -0.06 per unit of risk. If you would invest 1,000.00 in XLMedia PLC on September 2, 2024 and sell it today you would earn a total of 190.00 from holding XLMedia PLC or generate 19.0% 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. Caledonia Mining
Performance |
| Timeline |
| XLMedia PLC |
| Caledonia Mining |
XLMedia PLC and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Caledonia Mining
The main advantage of trading using opposite XLMedia PLC and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, Caledonia Mining 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 Caledonia Mining will offset losses from the drop in Caledonia Mining's long position.| XLMedia PLC vs. Premier Foods PLC | XLMedia PLC vs. Endeavour Mining Corp | XLMedia PLC vs. Associated British Foods | XLMedia PLC vs. Bisichi Mining PLC |
| Caledonia Mining vs. Givaudan SA | Caledonia Mining vs. Antofagasta PLC | Caledonia Mining vs. Centamin PLC | Caledonia Mining vs. Atalaya Mining |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |