Correlation Between XLMedia PLC and Public Storage

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Can any of the company-specific risk be diversified away by investing in both XLMedia PLC and Public Storage 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 Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Public Storage, you can compare the effects of market volatilities on XLMedia PLC and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Public Storage.

Diversification Opportunities for XLMedia PLC and Public Storage

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between XLMedia and Public is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Public Storage go up and down completely randomly.

Pair Corralation between XLMedia PLC and Public Storage

Assuming the 90 days horizon XLMedia PLC is expected to generate 4.38 times more return on investment than Public Storage. However, XLMedia PLC is 4.38 times more volatile than Public Storage. It trades about 0.01 of its potential returns per unit of risk. Public Storage is currently generating about 0.03 per unit of risk. If you would invest  16.00  in XLMedia PLC on September 20, 2024 and sell it today you would lose (6.00) from holding XLMedia PLC or give up 37.5% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

XLMedia PLC  vs.  Public Storage

 Performance 
       Timeline  
XLMedia PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
OK
Over the last 90 days XLMedia PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, XLMedia PLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Public Storage 

Risk-Adjusted Performance

0 of 100

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

XLMedia PLC and Public Storage Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with XLMedia PLC and Public Storage

The main advantage of trading using opposite XLMedia PLC and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.
The idea behind XLMedia PLC and Public Storage 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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