Correlation Between XLMedia PLC and SURETRACK MON

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

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

Diversification Opportunities for XLMedia PLC and SURETRACK MON

-0.39

Correlation Coefficient

XLMedia PLC  SURETRACK MON

Very good diversification

The 3 months correlation between XLMedia and SURETRACK is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and SURETRACK MON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SURETRACK MON 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 SURETRACK MON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SURETRACK MON has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and SURETRACK MON go up and down completely randomly.

Pair Corralation between XLMedia PLC and SURETRACK MON

Assuming the 90 days trading horizon XLMedia PLC is expected to under-perform the SURETRACK MON. But the stock apears to be less risky and, when comparing its historical volatility, XLMedia PLC is 2.73 times less risky than SURETRACK MON. The stock trades about -0.02 of its potential returns per unit of risk. The SURETRACK MON is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  38.00  in SURETRACK MON on October 7, 2024 and sell it today you would earn a total of  82.00  from holding SURETRACK MON or generate 215.79% return on investment over 90 days.

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

XLMedia PLC  vs.  SURETRACK MON

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SURETRACK MON

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SURETRACK MON are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SURETRACK MON exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XLMedia PLC and SURETRACK MON

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

The idea behind XLMedia PLC and SURETRACK MON 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.