Correlation Between ED Invest and X Trade
Can any of the company-specific risk be diversified away by investing in both ED Invest 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 ED Invest and X Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ED Invest SA and X Trade Brokers, you can compare the effects of market volatilities on ED Invest 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 ED Invest with a short position of X Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of ED Invest and X Trade.
Diversification Opportunities for ED Invest and X Trade
Weak diversification
The 3 months correlation between EDI and XTB is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ED Invest 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 ED Invest 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 ED Invest 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 ED Invest i.e., ED Invest and X Trade go up and down completely randomly.
Pair Corralation between ED Invest and X Trade
Assuming the 90 days trading horizon ED Invest SA is expected to under-perform the X Trade. In addition to that, ED Invest is 1.93 times more volatile than X Trade Brokers. It trades about -0.04 of its total potential returns per unit of risk. X Trade Brokers is currently generating about 0.13 per unit of volatility. If you would invest 6,932 in X Trade Brokers on September 13, 2024 and sell it today you would earn a total of 220.00 from holding X Trade Brokers or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ED Invest SA vs. X Trade Brokers
Performance |
| Timeline |
| ED Invest SA |
| X Trade Brokers |
ED Invest and X Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ED Invest and X Trade
The main advantage of trading using opposite ED Invest and X Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ED Invest 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.| ED Invest vs. Live Motion Games | ED Invest vs. Centrum Finansowe Banku | ED Invest vs. UF Games SA | ED Invest vs. Globe Trade Centre |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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