Correlation Between Yara International and Xplora Technologies
Can any of the company-specific risk be diversified away by investing in both Yara International and Xplora Technologies 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 Yara International and Xplora Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yara International ASA and Xplora Technologies As, you can compare the effects of market volatilities on Yara International and Xplora Technologies 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 Yara International with a short position of Xplora Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yara International and Xplora Technologies.
Diversification Opportunities for Yara International and Xplora Technologies
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yara and Xplora is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Yara International ASA and Xplora Technologies As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xplora Technologies and Yara International 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 Yara International ASA are associated (or correlated) with Xplora Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xplora Technologies has no effect on the direction of Yara International i.e., Yara International and Xplora Technologies go up and down completely randomly.
Pair Corralation between Yara International and Xplora Technologies
Assuming the 90 days trading horizon Yara International is expected to generate 4.92 times less return on investment than Xplora Technologies. But when comparing it to its historical volatility, Yara International ASA is 2.38 times less risky than Xplora Technologies. It trades about 0.11 of its potential returns per unit of risk. Xplora Technologies As is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,560 in Xplora Technologies As on November 2, 2024 and sell it today you would earn a total of 1,510 from holding Xplora Technologies As or generate 96.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yara International ASA vs. Xplora Technologies As
Performance |
| Timeline |
| Yara International ASA |
| Xplora Technologies |
Yara International and Xplora Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yara International and Xplora Technologies
The main advantage of trading using opposite Yara International and Xplora Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yara International position performs unexpectedly, Xplora Technologies 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 Xplora Technologies will offset losses from the drop in Xplora Technologies' long position.| Yara International vs. Telenor ASA | Yara International vs. Orkla ASA | Yara International vs. DnB ASA | Yara International vs. Storebrand ASA |
| Xplora Technologies vs. Airthings ASA | Xplora Technologies vs. Nordic Unmanned As | Xplora Technologies vs. Pexip Holding ASA | Xplora Technologies vs. Huddlestock Fintech As |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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