Correlation Between XLMedia PLC and Mobilezone Holding

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

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

Diversification Opportunities for XLMedia PLC and Mobilezone Holding

0.66

Correlation Coefficient

XLMedia PLC  Mobilezone Holding

Poor diversification

The 3 months correlation between XLMedia and Mobilezone is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and mobilezone holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mobilezone holding 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 Mobilezone Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mobilezone holding has no effect on the direction of XLMedia PLC i.e., XLMedia PLC and Mobilezone Holding go up and down completely randomly.

Pair Corralation between XLMedia PLC and Mobilezone Holding

Assuming the 90 days trading horizon XLMedia PLC is expected to generate 3.88 times less return on investment than Mobilezone Holding. In addition to that, XLMedia PLC is 1.74 times more volatile than mobilezone holding AG. It trades about 0.02 of its total potential returns per unit of risk. mobilezone holding AG is currently generating about 0.14 per unit of volatility. If you would invest  1,366  in mobilezone holding AG on September 5, 2024 and sell it today you would earn a total of  32.00  from holding mobilezone holding AG or generate 2.34% return on investment over 90 days.

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

XLMedia PLC  vs.  mobilezone holding AG

XLMedia PLC

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in XLMedia PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, XLMedia PLC exhibited solid returns over the last few months and may actually be approaching a breakup point.

mobilezone holding

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in mobilezone holding AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mobilezone Holding is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with XLMedia PLC and Mobilezone Holding

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

The idea behind XLMedia PLC and mobilezone holding AG 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.