Correlation Between XLMedia PLC and Greatland Gold
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and Greatland Gold 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 Greatland Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Greatland Gold plc, you can compare the effects of market volatilities on XLMedia PLC and Greatland Gold 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 Greatland Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Greatland Gold.
Diversification Opportunities for XLMedia PLC and Greatland Gold
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between XLMedia and Greatland is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Greatland Gold plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatland Gold plc 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 Greatland Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatland Gold plc has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Greatland Gold go up and down completely randomly.
Pair Corralation between XLMedia PLC and Greatland Gold
Assuming the 90 days trading horizon XLMedia PLC is expected to under-perform the Greatland Gold. In addition to that, XLMedia PLC is 1.47 times more volatile than Greatland Gold plc. It trades about -0.21 of its total potential returns per unit of risk. Greatland Gold plc is currently generating about -0.21 per unit of volatility. If you would invest 750.00 in Greatland Gold plc on October 9, 2024 and sell it today you would lose (108.00) from holding Greatland Gold plc or give up 14.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XLMedia PLC vs. Greatland Gold plc
Performance |
| Timeline |
| XLMedia PLC |
| Greatland Gold plc |
XLMedia PLC and Greatland Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Greatland Gold
The main advantage of trading using opposite XLMedia PLC and Greatland Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, Greatland Gold 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 Greatland Gold will offset losses from the drop in Greatland Gold's long position.| XLMedia PLC vs. CVR Energy | XLMedia PLC vs. Viridian Therapeutics | XLMedia PLC vs. Nationwide Building Society | XLMedia PLC vs. Digital Realty Trust |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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