Correlation Between XLMedia PLC and Marstons PLC
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and Marstons PLC 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 Marstons PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Marstons PLC, you can compare the effects of market volatilities on XLMedia PLC and Marstons PLC 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 Marstons PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Marstons PLC.
Diversification Opportunities for XLMedia PLC and Marstons PLC
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XLMedia and Marstons is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Marstons PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marstons 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 Marstons PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marstons PLC has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Marstons PLC go up and down completely randomly.
Pair Corralation between XLMedia PLC and Marstons PLC
Assuming the 90 days trading horizon XLMedia PLC is expected to under-perform the Marstons PLC. In addition to that, XLMedia PLC is 1.65 times more volatile than Marstons PLC. It trades about -0.13 of its total potential returns per unit of risk. Marstons PLC is currently generating about 0.1 per unit of volatility. If you would invest 4,160 in Marstons PLC on September 24, 2024 and sell it today you would earn a total of 390.00 from holding Marstons PLC or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XLMedia PLC vs. Marstons PLC
Performance |
| Timeline |
| XLMedia PLC |
| Marstons PLC |
XLMedia PLC and Marstons PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Marstons PLC
The main advantage of trading using opposite XLMedia PLC and Marstons PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, Marstons PLC 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 Marstons PLC will offset losses from the drop in Marstons PLC's long position.| XLMedia PLC vs. Fulcrum Metals PLC | XLMedia PLC vs. Jacquet Metal Service | XLMedia PLC vs. Silvercorp Metals | XLMedia PLC vs. Premier Foods PLC |
| Marstons PLC vs. Ondine Biomedical | Marstons PLC vs. Europa Metals | Marstons PLC vs. Revolution Beauty Group | Marstons PLC vs. Moonpig Group 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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