Correlation Between XMReality and Polygiene
Can any of the company-specific risk be diversified away by investing in both XMReality and Polygiene 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 Polygiene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XMReality AB and Polygiene AB, you can compare the effects of market volatilities on XMReality and Polygiene 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 Polygiene. Check out your portfolio center. Please also check ongoing floating volatility patterns of XMReality and Polygiene.
Diversification Opportunities for XMReality and Polygiene
Very good diversification
The 3 months correlation between XMReality and Polygiene is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding XMReality AB and Polygiene AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polygiene AB 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 Polygiene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polygiene AB has no effect on the direction of XMReality i.e., XMReality and Polygiene go up and down completely randomly.
Pair Corralation between XMReality and Polygiene
Assuming the 90 days trading horizon XMReality AB is expected to under-perform the Polygiene. In addition to that, XMReality is 1.14 times more volatile than Polygiene AB. It trades about -0.05 of its total potential returns per unit of risk. Polygiene AB is currently generating about 0.19 per unit of volatility. If you would invest 1,075 in Polygiene AB on August 30, 2024 and sell it today you would earn a total of 215.00 from holding Polygiene AB or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XMReality AB vs. Polygiene AB
Performance |
| Timeline |
| XMReality AB |
| Polygiene AB |
XMReality and Polygiene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XMReality and Polygiene
The main advantage of trading using opposite XMReality and Polygiene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XMReality position performs unexpectedly, Polygiene 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 Polygiene will offset losses from the drop in Polygiene's long position.| XMReality vs. Lifco AB | XMReality vs. Lagercrantz Group AB | XMReality vs. Addtech AB | XMReality vs. Instalco Intressenter AB |
| Polygiene vs. G5 Entertainment publ | Polygiene vs. Nexam Chemical Holding | Polygiene vs. Swedencare publ AB | Polygiene vs. Genovis AB |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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