Correlation Between HM Inwest and MW Trade
Can any of the company-specific risk be diversified away by investing in both HM Inwest and MW 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 HM Inwest and MW Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HM Inwest SA and MW Trade SA, you can compare the effects of market volatilities on HM Inwest and MW 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 HM Inwest with a short position of MW Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of HM Inwest and MW Trade.
Diversification Opportunities for HM Inwest and MW Trade
Good diversification
The 3 months correlation between HMI and MWT is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding HM Inwest SA and MW Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MW Trade SA and HM Inwest 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 HM Inwest SA are associated (or correlated) with MW Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MW Trade SA has no effect on the direction of HM Inwest i.e., HM Inwest and MW Trade go up and down completely randomly.
Pair Corralation between HM Inwest and MW Trade
Assuming the 90 days trading horizon HM Inwest SA is expected to generate 2.46 times more return on investment than MW Trade. However, HM Inwest is 2.46 times more volatile than MW Trade SA. It trades about 0.12 of its potential returns per unit of risk. MW Trade SA is currently generating about -0.04 per unit of risk. If you would invest 4,220 in HM Inwest SA on November 28, 2024 and sell it today you would earn a total of 630.00 from holding HM Inwest SA or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HM Inwest SA vs. MW Trade SA
Performance |
| Timeline |
| HM Inwest SA |
| MW Trade SA |
HM Inwest and MW Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HM Inwest and MW Trade
The main advantage of trading using opposite HM Inwest and MW Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HM Inwest position performs unexpectedly, MW 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 MW Trade will offset losses from the drop in MW Trade's long position.| HM Inwest vs. Echo Investment SA | HM Inwest vs. Gaming Factory SA | HM Inwest vs. Varsav Game Studios | HM Inwest vs. GreenX Metals |
| MW Trade vs. Vivid Games SA | MW Trade vs. Alior Bank SA | MW Trade vs. Datawalk SA | MW Trade vs. Noble Financials 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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