Correlation Between Piper Sandler and MarketAxess Holdings
Can any of the company-specific risk be diversified away by investing in both Piper Sandler and MarketAxess Holdings 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 Piper Sandler and MarketAxess Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Piper Sandler Companies and MarketAxess Holdings, you can compare the effects of market volatilities on Piper Sandler and MarketAxess Holdings 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 Piper Sandler with a short position of MarketAxess Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piper Sandler and MarketAxess Holdings.
Diversification Opportunities for Piper Sandler and MarketAxess Holdings
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Piper and MarketAxess is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Piper Sandler Companies and MarketAxess Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarketAxess Holdings and Piper Sandler 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 Piper Sandler Companies are associated (or correlated) with MarketAxess Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MarketAxess Holdings has no effect on the direction of Piper Sandler i.e., Piper Sandler and MarketAxess Holdings go up and down completely randomly.
Pair Corralation between Piper Sandler and MarketAxess Holdings
Given the investment horizon of 90 days Piper Sandler Companies is expected to generate 3.84 times more return on investment than MarketAxess Holdings. However, Piper Sandler is 3.84 times more volatile than MarketAxess Holdings. It trades about 0.18 of its potential returns per unit of risk. MarketAxess Holdings is currently generating about -0.38 per unit of risk. If you would invest 28,839 in Piper Sandler Companies on August 24, 2024 and sell it today you would earn a total of 5,195 from holding Piper Sandler Companies or generate 18.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Piper Sandler Companies vs. MarketAxess Holdings
Performance |
| Timeline |
| Piper Sandler Companies |
| MarketAxess Holdings |
Piper Sandler and MarketAxess Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piper Sandler and MarketAxess Holdings
The main advantage of trading using opposite Piper Sandler and MarketAxess Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piper Sandler position performs unexpectedly, MarketAxess Holdings 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 MarketAxess Holdings will offset losses from the drop in MarketAxess Holdings' long position.| Piper Sandler vs. Perella Weinberg Partners | Piper Sandler vs. Evercore Partners | Piper Sandler vs. Lazard | Piper Sandler vs. Moelis Co |
| MarketAxess Holdings vs. Interactive Brokers Group | MarketAxess Holdings vs. Evercore Partners | MarketAxess Holdings vs. PJT Partners | MarketAxess Holdings vs. LPL Financial 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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