Correlation Between IMC SA and X Trade
Can any of the company-specific risk be diversified away by investing in both IMC SA 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 IMC SA and X Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMC SA and X Trade Brokers, you can compare the effects of market volatilities on IMC SA 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 IMC SA with a short position of X Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMC SA and X Trade.
Diversification Opportunities for IMC SA and X Trade
Poor diversification
The 3 months correlation between IMC and XTB is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding IMC 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 IMC SA 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 IMC 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 IMC SA i.e., IMC SA and X Trade go up and down completely randomly.
Pair Corralation between IMC SA and X Trade
Assuming the 90 days trading horizon IMC SA is expected to generate 2.82 times more return on investment than X Trade. However, IMC SA is 2.82 times more volatile than X Trade Brokers. It trades about 0.46 of its potential returns per unit of risk. X Trade Brokers is currently generating about 0.13 per unit of risk. If you would invest 1,140 in IMC SA on September 13, 2024 and sell it today you would earn a total of 460.00 from holding IMC SA or generate 40.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
IMC SA vs. X Trade Brokers
Performance |
| Timeline |
| IMC SA |
| X Trade Brokers |
IMC SA and X Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMC SA and X Trade
The main advantage of trading using opposite IMC SA and X Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMC SA 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.| IMC SA vs. X Trade Brokers | IMC SA vs. Centrum Finansowe Banku | IMC SA vs. Skyline Investment SA | IMC SA vs. Igoria Trade 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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