Correlation Between MarketAxess Holdings and Xp
Can any of the company-specific risk be diversified away by investing in both MarketAxess Holdings and Xp 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 MarketAxess Holdings and Xp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MarketAxess Holdings and Xp Inc, you can compare the effects of market volatilities on MarketAxess Holdings and Xp 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 MarketAxess Holdings with a short position of Xp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MarketAxess Holdings and Xp.
Diversification Opportunities for MarketAxess Holdings and Xp
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MarketAxess and Xp is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding MarketAxess Holdings and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc and MarketAxess Holdings 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 MarketAxess Holdings are associated (or correlated) with Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of MarketAxess Holdings i.e., MarketAxess Holdings and Xp go up and down completely randomly.
Pair Corralation between MarketAxess Holdings and Xp
Given the investment horizon of 90 days MarketAxess Holdings is expected to generate 0.48 times more return on investment than Xp. However, MarketAxess Holdings is 2.1 times less risky than Xp. It trades about -0.36 of its potential returns per unit of risk. Xp Inc is currently generating about -0.21 per unit of risk. If you would invest 28,949 in MarketAxess Holdings on October 24, 2024 and sell it today you would lose (6,899) from holding MarketAxess Holdings or give up 23.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MarketAxess Holdings vs. Xp Inc
Performance |
| Timeline |
| MarketAxess Holdings |
| Xp Inc |
MarketAxess Holdings and Xp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MarketAxess Holdings and Xp
The main advantage of trading using opposite MarketAxess Holdings and Xp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MarketAxess Holdings position performs unexpectedly, Xp 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 Xp will offset losses from the drop in Xp's long position.| MarketAxess Holdings vs. Interactive Brokers Group | MarketAxess Holdings vs. Evercore Partners | MarketAxess Holdings vs. PJT Partners | MarketAxess Holdings vs. LPL Financial Holdings |
| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
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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