Correlation Between MW Trade and Igoria Trade
Can any of the company-specific risk be diversified away by investing in both MW Trade and Igoria 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 MW Trade and Igoria Trade 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 Igoria Trade SA, you can compare the effects of market volatilities on MW Trade and Igoria 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 MW Trade with a short position of Igoria Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of MW Trade and Igoria Trade.
Diversification Opportunities for MW Trade and Igoria Trade
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MWT and Igoria is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MW Trade SA and Igoria Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Igoria Trade 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 Igoria Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Igoria Trade SA has no effect on the direction of MW Trade i.e., MW Trade and Igoria Trade go up and down completely randomly.
Pair Corralation between MW Trade and Igoria Trade
Assuming the 90 days trading horizon MW Trade SA is expected to under-perform the Igoria Trade. But the stock apears to be less risky and, when comparing its historical volatility, MW Trade SA is 1.38 times less risky than Igoria Trade. The stock trades about -0.15 of its potential returns per unit of risk. The Igoria Trade SA is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Igoria Trade SA on September 1, 2024 and sell it today you would lose (5.00) from holding Igoria Trade SA or give up 15.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MW Trade SA vs. Igoria Trade SA
Performance |
| Timeline |
| MW Trade SA |
| Igoria Trade SA |
MW Trade and Igoria Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MW Trade and Igoria Trade
The main advantage of trading using opposite MW Trade and Igoria Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MW Trade position performs unexpectedly, Igoria 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 Igoria Trade will offset losses from the drop in Igoria Trade's long position.| MW Trade vs. Intersport Polska SA | MW Trade vs. Quantum Software SA | MW Trade vs. TEN SQUARE GAMES | MW Trade vs. Detalion Games SA |
| Igoria Trade vs. Asseco Business Solutions | Igoria Trade vs. Detalion Games SA | Igoria Trade vs. Asseco South Eastern | Igoria Trade vs. CFI Holding 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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