Correlation Between Noble Financials and X Trade
Can any of the company-specific risk be diversified away by investing in both Noble Financials 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 Noble Financials and X Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noble Financials SA and X Trade Brokers, you can compare the effects of market volatilities on Noble Financials 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 Noble Financials with a short position of X Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Financials and X Trade.
Diversification Opportunities for Noble Financials and X Trade
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Noble and XTB is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Noble Financials 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 Noble Financials 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 Noble Financials 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 Noble Financials i.e., Noble Financials and X Trade go up and down completely randomly.
Pair Corralation between Noble Financials and X Trade
Assuming the 90 days trading horizon Noble Financials is expected to generate 1.2 times less return on investment than X Trade. In addition to that, Noble Financials is 2.31 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 0.1 per unit of volatility. If you would invest 2,389 in X Trade Brokers on August 26, 2024 and sell it today you would earn a total of 4,607 from holding X Trade Brokers or generate 192.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noble Financials SA vs. X Trade Brokers
Performance |
| Timeline |
| Noble Financials |
| X Trade Brokers |
Noble Financials and X Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noble Financials and X Trade
The main advantage of trading using opposite Noble Financials and X Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Financials 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.| Noble Financials vs. Globe Trade Centre | Noble Financials vs. Asseco Business Solutions | Noble Financials vs. Detalion Games SA | Noble Financials vs. Asseco South Eastern |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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