Correlation Between XMReality and Powercell Sweden
Can any of the company-specific risk be diversified away by investing in both XMReality and Powercell Sweden 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 XMReality and Powercell Sweden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XMReality AB and Powercell Sweden, you can compare the effects of market volatilities on XMReality and Powercell Sweden 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 XMReality with a short position of Powercell Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of XMReality and Powercell Sweden.
Diversification Opportunities for XMReality and Powercell Sweden
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XMReality and Powercell is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding XMReality AB and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden and XMReality 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 XMReality AB are associated (or correlated) with Powercell Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powercell Sweden has no effect on the direction of XMReality i.e., XMReality and Powercell Sweden go up and down completely randomly.
Pair Corralation between XMReality and Powercell Sweden
Assuming the 90 days trading horizon XMReality AB is expected to under-perform the Powercell Sweden. In addition to that, XMReality is 2.01 times more volatile than Powercell Sweden. It trades about -0.05 of its total potential returns per unit of risk. Powercell Sweden is currently generating about -0.05 per unit of volatility. If you would invest 13,140 in Powercell Sweden on August 26, 2024 and sell it today you would lose (9,698) from holding Powercell Sweden or give up 73.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XMReality AB vs. Powercell Sweden
Performance |
| Timeline |
| XMReality AB |
| Powercell Sweden |
XMReality and Powercell Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XMReality and Powercell Sweden
The main advantage of trading using opposite XMReality and Powercell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XMReality position performs unexpectedly, Powercell Sweden 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 Powercell Sweden will offset losses from the drop in Powercell Sweden's long position.| XMReality vs. Tangiamo Touch Technology | XMReality vs. Zaplox AB | XMReality vs. Alligator Bioscience AB | XMReality vs. Garo AB |
| Powercell Sweden vs. Divio Technologies AB | Powercell Sweden vs. XMReality AB | Powercell Sweden vs. KABE Group AB | Powercell Sweden vs. IAR Systems Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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