Correlation Between Plus500 and MarketAxess Holdings
Can any of the company-specific risk be diversified away by investing in both Plus500 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 Plus500 and MarketAxess Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plus500 and MarketAxess Holdings, you can compare the effects of market volatilities on Plus500 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 Plus500 with a short position of MarketAxess Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plus500 and MarketAxess Holdings.
Diversification Opportunities for Plus500 and MarketAxess Holdings
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Plus500 and MarketAxess is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Plus500 and MarketAxess Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarketAxess Holdings and Plus500 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 Plus500 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 Plus500 i.e., Plus500 and MarketAxess Holdings go up and down completely randomly.
Pair Corralation between Plus500 and MarketAxess Holdings
Assuming the 90 days horizon Plus500 is expected to generate 1.89 times more return on investment than MarketAxess Holdings. However, Plus500 is 1.89 times more volatile than MarketAxess Holdings. It trades about 0.04 of its potential returns per unit of risk. MarketAxess Holdings is currently generating about 0.01 per unit of risk. If you would invest 2,300 in Plus500 on August 30, 2024 and sell it today you would earn a total of 969.00 from holding Plus500 or generate 42.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 71.98% |
| Values | Daily Returns |
Plus500 vs. MarketAxess Holdings
Performance |
| Timeline |
| Plus500 |
| MarketAxess Holdings |
Plus500 and MarketAxess Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plus500 and MarketAxess Holdings
The main advantage of trading using opposite Plus500 and MarketAxess Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plus500 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.| Plus500 vs. MarketAxess Holdings | Plus500 vs. Interactive Brokers Group | Plus500 vs. Evercore Partners | Plus500 vs. PJT Partners |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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