Correlation Between Allegroeu and X Trade
Can any of the company-specific risk be diversified away by investing in both Allegroeu and X Trade 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 Allegroeu and X Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegroeu SA and X Trade Brokers, you can compare the effects of market volatilities on Allegroeu and X Trade 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 Allegroeu with a short position of X Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegroeu and X Trade.
Diversification Opportunities for Allegroeu and X Trade
Very good diversification
The 3 months correlation between Allegroeu and XTB is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Allegroeu SA and X Trade Brokers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Trade Brokers and Allegroeu 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 Allegroeu SA are associated (or correlated) with X Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Trade Brokers has no effect on the direction of Allegroeu i.e., Allegroeu and X Trade go up and down completely randomly.
Pair Corralation between Allegroeu and X Trade
Assuming the 90 days trading horizon Allegroeu SA is expected to under-perform the X Trade. But the stock apears to be less risky and, when comparing its historical volatility, Allegroeu SA is 1.08 times less risky than X Trade. The stock trades about -0.01 of its potential returns per unit of risk. The X Trade Brokers is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,545 in X Trade Brokers on August 29, 2024 and sell it today you would earn a total of 3,481 from holding X Trade Brokers or generate 98.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegroeu SA vs. X Trade Brokers
Performance |
| Timeline |
| Allegroeu SA |
| X Trade Brokers |
Allegroeu and X Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegroeu and X Trade
The main advantage of trading using opposite Allegroeu and X Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegroeu position performs unexpectedly, X Trade 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 X Trade will offset losses from the drop in X Trade's long position.| Allegroeu vs. Movie Games SA | Allegroeu vs. GreenX Metals | Allegroeu vs. Intersport Polska SA | Allegroeu vs. Echo Investment SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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