Correlation Between Tradeweb Markets and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both Tradeweb Markets and FLOW TRADERS 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 Tradeweb Markets and FLOW TRADERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradeweb Markets and FLOW TRADERS LTD, you can compare the effects of market volatilities on Tradeweb Markets and FLOW TRADERS 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 Tradeweb Markets with a short position of FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and FLOW TRADERS.
Diversification Opportunities for Tradeweb Markets and FLOW TRADERS
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tradeweb and FLOW is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD and Tradeweb Markets 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 Tradeweb Markets are associated (or correlated) with FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of Tradeweb Markets i.e., Tradeweb Markets and FLOW TRADERS go up and down completely randomly.
Pair Corralation between Tradeweb Markets and FLOW TRADERS
Assuming the 90 days horizon Tradeweb Markets is expected to generate 1.26 times more return on investment than FLOW TRADERS. However, Tradeweb Markets is 1.26 times more volatile than FLOW TRADERS LTD. It trades about 0.09 of its potential returns per unit of risk. FLOW TRADERS LTD is currently generating about -0.02 per unit of risk. If you would invest 12,300 in Tradeweb Markets on August 25, 2024 and sell it today you would earn a total of 400.00 from holding Tradeweb Markets or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradeweb Markets vs. FLOW TRADERS LTD
Performance |
| Timeline |
| Tradeweb Markets |
| FLOW TRADERS LTD |
Tradeweb Markets and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradeweb Markets and FLOW TRADERS
The main advantage of trading using opposite Tradeweb Markets and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradeweb Markets position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| Tradeweb Markets vs. Apple Inc | Tradeweb Markets vs. Apple Inc | Tradeweb Markets vs. Apple Inc | Tradeweb Markets vs. Apple Inc |
| FLOW TRADERS vs. Insurance Australia Group | FLOW TRADERS vs. MACOM Technology Solutions | FLOW TRADERS vs. HANOVER INSURANCE | FLOW TRADERS vs. Reinsurance Group of |
Check out your portfolio center.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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