Correlation Between MW Trade and Amica SA
Can any of the company-specific risk be diversified away by investing in both MW Trade and Amica SA 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 MW Trade and Amica SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MW Trade SA and Amica SA, you can compare the effects of market volatilities on MW Trade and Amica SA 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 MW Trade with a short position of Amica SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MW Trade and Amica SA.
Diversification Opportunities for MW Trade and Amica SA
Average diversification
The 3 months correlation between MWT and Amica is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding MW Trade SA and Amica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amica SA and MW Trade 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 MW Trade SA are associated (or correlated) with Amica SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amica SA has no effect on the direction of MW Trade i.e., MW Trade and Amica SA go up and down completely randomly.
Pair Corralation between MW Trade and Amica SA
Assuming the 90 days trading horizon MW Trade SA is expected to generate 1.54 times more return on investment than Amica SA. However, MW Trade is 1.54 times more volatile than Amica SA. It trades about -0.02 of its potential returns per unit of risk. Amica SA is currently generating about -0.03 per unit of risk. If you would invest 464.00 in MW Trade SA on September 4, 2024 and sell it today you would lose (136.00) from holding MW Trade SA or give up 29.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MW Trade SA vs. Amica SA
Performance |
| Timeline |
| MW Trade SA |
| Amica SA |
MW Trade and Amica SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MW Trade and Amica SA
The main advantage of trading using opposite MW Trade and Amica SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MW Trade position performs unexpectedly, Amica SA 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 Amica SA will offset losses from the drop in Amica SA's long position.| MW Trade vs. X Trade Brokers | MW Trade vs. SOFTWARE MANSION SPOLKA | MW Trade vs. Quantum Software SA | MW Trade vs. Road Studio SA |
| Amica SA vs. Biztech Konsulting SA | Amica SA vs. Gamedust SA | Amica SA vs. PZ Cormay SA | Amica SA vs. Skyline Investment 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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