Correlation Between XLMedia PLC and Revolution Beauty
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and Revolution Beauty 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 Revolution Beauty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Revolution Beauty Group, you can compare the effects of market volatilities on XLMedia PLC and Revolution Beauty 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 Revolution Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Revolution Beauty.
Diversification Opportunities for XLMedia PLC and Revolution Beauty
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XLMedia and Revolution is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Revolution Beauty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revolution Beauty 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 Revolution Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revolution Beauty has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Revolution Beauty go up and down completely randomly.
Pair Corralation between XLMedia PLC and Revolution Beauty
Assuming the 90 days trading horizon XLMedia PLC is expected to under-perform the Revolution Beauty. But the stock apears to be less risky and, when comparing its historical volatility, XLMedia PLC is 1.67 times less risky than Revolution Beauty. The stock trades about -0.25 of its potential returns per unit of risk. The Revolution Beauty Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,470 in Revolution Beauty Group on October 12, 2024 and sell it today you would earn a total of 530.00 from holding Revolution Beauty Group or generate 36.05% 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. Revolution Beauty Group
Performance |
| Timeline |
| XLMedia PLC |
| Revolution Beauty |
XLMedia PLC and Revolution Beauty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Revolution Beauty
The main advantage of trading using opposite XLMedia PLC and Revolution Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, Revolution Beauty 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 Revolution Beauty will offset losses from the drop in Revolution Beauty's long position.| XLMedia PLC vs. Worldwide Healthcare Trust | XLMedia PLC vs. Universal Health Services | XLMedia PLC vs. Spirent Communications plc | XLMedia PLC vs. Telecom Italia SpA |
| Revolution Beauty vs. XLMedia PLC | Revolution Beauty vs. Blackrock World Mining | Revolution Beauty vs. Live Nation Entertainment | Revolution Beauty vs. Beowulf 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |