Correlation Between Shoper SA and MW Trade
Can any of the company-specific risk be diversified away by investing in both Shoper SA and MW 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 Shoper SA and MW Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoper SA and MW Trade SA, you can compare the effects of market volatilities on Shoper SA and MW 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 Shoper SA with a short position of MW Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoper SA and MW Trade.
Diversification Opportunities for Shoper SA and MW Trade
Poor diversification
The 3 months correlation between Shoper and MWT is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shoper SA and MW Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MW Trade SA and Shoper SA 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 Shoper SA are associated (or correlated) with MW Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MW Trade SA has no effect on the direction of Shoper SA i.e., Shoper SA and MW Trade go up and down completely randomly.
Pair Corralation between Shoper SA and MW Trade
Assuming the 90 days trading horizon Shoper SA is expected to generate 0.85 times more return on investment than MW Trade. However, Shoper SA is 1.18 times less risky than MW Trade. It trades about -0.06 of its potential returns per unit of risk. MW Trade SA is currently generating about -0.25 per unit of risk. If you would invest 4,380 in Shoper SA on September 13, 2024 and sell it today you would lose (320.00) from holding Shoper SA or give up 7.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Shoper SA vs. MW Trade SA
Performance |
| Timeline |
| Shoper SA |
| MW Trade SA |
Shoper SA and MW Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoper SA and MW Trade
The main advantage of trading using opposite Shoper SA and MW Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoper SA position performs unexpectedly, MW 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 MW Trade will offset losses from the drop in MW Trade's long position.| Shoper SA vs. MW Trade SA | Shoper SA vs. UF Games SA | Shoper SA vs. Monnari Trade SA | Shoper SA vs. Logintrade SA |
| MW Trade vs. Kruk SA | MW Trade vs. Asseco Business Solutions | MW Trade vs. Detalion Games SA | MW Trade vs. Asseco South Eastern |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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