Correlation Between Marketwise and AMTD Digital
Can any of the company-specific risk be diversified away by investing in both Marketwise and AMTD Digital 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 Marketwise and AMTD Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marketwise and AMTD Digital, you can compare the effects of market volatilities on Marketwise and AMTD Digital 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 Marketwise with a short position of AMTD Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marketwise and AMTD Digital.
Diversification Opportunities for Marketwise and AMTD Digital
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marketwise and AMTD is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Marketwise and AMTD Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMTD Digital and Marketwise 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 Marketwise are associated (or correlated) with AMTD Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMTD Digital has no effect on the direction of Marketwise i.e., Marketwise and AMTD Digital go up and down completely randomly.
Pair Corralation between Marketwise and AMTD Digital
Given the investment horizon of 90 days Marketwise is expected to generate 1.53 times more return on investment than AMTD Digital. However, Marketwise is 1.53 times more volatile than AMTD Digital. It trades about -0.11 of its potential returns per unit of risk. AMTD Digital is currently generating about -0.18 per unit of risk. If you would invest 61.00 in Marketwise on August 28, 2024 and sell it today you would lose (10.00) from holding Marketwise or give up 16.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marketwise vs. AMTD Digital
Performance |
| Timeline |
| Marketwise |
| AMTD Digital |
Marketwise and AMTD Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marketwise and AMTD Digital
The main advantage of trading using opposite Marketwise and AMTD Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marketwise position performs unexpectedly, AMTD Digital 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 AMTD Digital will offset losses from the drop in AMTD Digital's long position.| Marketwise vs. Blackboxstocks | Marketwise vs. Enfusion | Marketwise vs. Issuer Direct Corp | Marketwise vs. eGain |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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