Correlation Between Mobius Investment and XLMedia PLC

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

By analyzing existing cross correlation between Mobius Investment Trust and XLMedia PLC, you can compare the effects of market volatilities on Mobius Investment and XLMedia PLC 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 Mobius Investment with a short position of XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobius Investment and XLMedia PLC.

Diversification Opportunities for Mobius Investment and XLMedia PLC

-0.06

Correlation Coefficient

Mobius Investment  XLMedia PLC

Good diversification

The 3 months correlation between Mobius and XLMedia is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mobius Investment Trust and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC and Mobius Investment 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 Mobius Investment Trust are associated (or correlated) with XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Mobius Investment i.e., Mobius Investment and XLMedia PLC go up and down completely randomly.

Pair Corralation between Mobius Investment and XLMedia PLC

Assuming the 90 days trading horizon Mobius Investment Trust is expected to under-perform the XLMedia PLC. But the stock apears to be less risky and, when comparing its historical volatility, Mobius Investment Trust is 1.59 times less risky than XLMedia PLC. The stock trades about -0.1 of its potential returns per unit of risk. The XLMedia PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  920.00  in XLMedia PLC on December 23, 2024 and sell it today you would earn a total of  80.00  from holding XLMedia PLC or generate 8.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mobius Investment Trust  vs.  XLMedia PLC

Mobius Investment Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mobius Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

XLMedia PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in XLMedia PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, XLMedia PLC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mobius Investment and XLMedia PLC

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

The idea behind Mobius Investment Trust and XLMedia PLC 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.