Correlation Between MW Trade and Aplisens
Can any of the company-specific risk be diversified away by investing in both MW Trade and Aplisens 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 Aplisens 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 Aplisens SA, you can compare the effects of market volatilities on MW Trade and Aplisens 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 Aplisens. Check out your portfolio center. Please also check ongoing floating volatility patterns of MW Trade and Aplisens.
Diversification Opportunities for MW Trade and Aplisens
Very poor diversification
The 3 months correlation between MWT and Aplisens is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding MW Trade SA and Aplisens SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aplisens 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 Aplisens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aplisens SA has no effect on the direction of MW Trade i.e., MW Trade and Aplisens go up and down completely randomly.
Pair Corralation between MW Trade and Aplisens
Assuming the 90 days trading horizon MW Trade SA is expected to under-perform the Aplisens. In addition to that, MW Trade is 1.79 times more volatile than Aplisens SA. It trades about -0.25 of its total potential returns per unit of risk. Aplisens SA is currently generating about 0.02 per unit of volatility. If you would invest 1,885 in Aplisens SA on September 13, 2024 and sell it today you would earn a total of 5.00 from holding Aplisens SA or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
MW Trade SA vs. Aplisens SA
Performance |
| Timeline |
| MW Trade SA |
| Aplisens SA |
MW Trade and Aplisens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MW Trade and Aplisens
The main advantage of trading using opposite MW Trade and Aplisens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MW Trade position performs unexpectedly, Aplisens 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 Aplisens will offset losses from the drop in Aplisens' long position.| MW Trade vs. Kruk SA | MW Trade vs. Asseco Business Solutions | MW Trade vs. Detalion Games SA | MW Trade vs. Asseco South Eastern |
| Aplisens vs. New Tech Venture | Aplisens vs. Globe Trade Centre | Aplisens vs. Monnari Trade SA | Aplisens vs. Echo 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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