Correlation Between UF Games and X Trade
Can any of the company-specific risk be diversified away by investing in both UF Games and X 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 UF Games and X Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UF Games SA and X Trade Brokers, you can compare the effects of market volatilities on UF Games and X 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 UF Games with a short position of X Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of UF Games and X Trade.
Diversification Opportunities for UF Games and X Trade
Excellent diversification
The 3 months correlation between UFG and XTB is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding UF Games SA and X Trade Brokers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Trade Brokers and UF Games 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 UF Games SA are associated (or correlated) with X Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Trade Brokers has no effect on the direction of UF Games i.e., UF Games and X Trade go up and down completely randomly.
Pair Corralation between UF Games and X Trade
Assuming the 90 days trading horizon UF Games SA is expected to under-perform the X Trade. But the stock apears to be less risky and, when comparing its historical volatility, UF Games SA is 1.16 times less risky than X Trade. The stock trades about -0.42 of its potential returns per unit of risk. The X Trade Brokers is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6,562 in X Trade Brokers on August 29, 2024 and sell it today you would earn a total of 518.00 from holding X Trade Brokers or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
UF Games SA vs. X Trade Brokers
Performance |
| Timeline |
| UF Games SA |
| X Trade Brokers |
UF Games and X Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UF Games and X Trade
The main advantage of trading using opposite UF Games and X Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UF Games position performs unexpectedly, X 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 X Trade will offset losses from the drop in X Trade's long position.| UF Games vs. Skyline Investment SA | UF Games vs. Medicofarma Biotech SA | UF Games vs. Saule Technologies SA | UF Games vs. SOFTWARE MANSION SPOLKA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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