Correlation Between XLMedia PLC and CENTURIA OFFICE

Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and CENTURIA OFFICE 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 CENTURIA OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between XLMedia PLC and CENTURIA OFFICE REIT, you can compare the effects of market volatilities on XLMedia PLC and CENTURIA OFFICE 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 CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and CENTURIA OFFICE.

Diversification Opportunities for XLMedia PLC and CENTURIA OFFICE

-0.41

Correlation Coefficient

XLMedia PLC  CENTURIA OFFICE

Very good diversification

The 3 months correlation between XLMedia and CENTURIA is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT 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 CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and CENTURIA OFFICE go up and down completely randomly.

Pair Corralation between XLMedia PLC and CENTURIA OFFICE

Assuming the 90 days horizon XLMedia PLC is expected to generate 2.06 times more return on investment than CENTURIA OFFICE. However, XLMedia PLC is 2.06 times more volatile than CENTURIA OFFICE REIT. It trades about 0.13 of its potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about -0.04 per unit of risk. If you would invest  11.00  in XLMedia PLC on September 13, 2024 and sell it today you would earn a total of  3.00  from holding XLMedia PLC or generate 27.27% 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.  CENTURIA OFFICE REIT

XLMedia PLC

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in XLMedia PLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, XLMedia PLC reported solid returns over the last few months and may actually be approaching a breakup point.

CENTURIA OFFICE REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CENTURIA OFFICE REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CENTURIA OFFICE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with XLMedia PLC and CENTURIA OFFICE

The main advantage of trading using opposite XLMedia PLC and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, CENTURIA OFFICE 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 CENTURIA OFFICE will offset losses from the drop in CENTURIA OFFICE's long position.

The idea behind XLMedia PLC and CENTURIA OFFICE REIT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.