Correlation Between XLMedia PLC and AMG Advanced

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

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

Diversification Opportunities for XLMedia PLC and AMG Advanced

0.43

Correlation Coefficient

XLMedia PLC  AMG Advanced

Very weak diversification

The 3 months correlation between XLMedia and AMG is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu 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 AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and AMG Advanced go up and down completely randomly.

Pair Corralation between XLMedia PLC and AMG Advanced

Assuming the 90 days trading horizon XLMedia PLC is expected to generate 0.54 times more return on investment than AMG Advanced. However, XLMedia PLC is 1.84 times less risky than AMG Advanced. It trades about 0.4 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.06 per unit of risk. If you would invest  895.00  in XLMedia PLC on October 25, 2024 and sell it today you would earn a total of  150.00  from holding XLMedia PLC or generate 16.76% return on investment over 90 days.

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

XLMedia PLC  vs.  AMG Advanced Metallurgical

XLMedia PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XLMedia PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, XLMedia PLC is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

AMG Advanced Metallu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMG Advanced Metallurgical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with XLMedia PLC and AMG Advanced

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

The idea behind XLMedia PLC and AMG Advanced Metallurgical 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..