Correlation Between X Trade and Alior Bank
Can any of the company-specific risk be diversified away by investing in both X Trade and Alior Bank 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 X Trade and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Trade Brokers and Alior Bank SA, you can compare the effects of market volatilities on X Trade and Alior Bank 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 X Trade with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Trade and Alior Bank.
Diversification Opportunities for X Trade and Alior Bank
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between XTB and Alior is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding X Trade Brokers and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank SA and X 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 X Trade Brokers are associated (or correlated) with Alior Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alior Bank SA has no effect on the direction of X Trade i.e., X Trade and Alior Bank go up and down completely randomly.
Pair Corralation between X Trade and Alior Bank
Assuming the 90 days trading horizon X Trade Brokers is expected to generate 0.56 times more return on investment than Alior Bank. However, X Trade Brokers is 1.77 times less risky than Alior Bank. It trades about 0.24 of its potential returns per unit of risk. Alior Bank SA is currently generating about 0.06 per unit of risk. 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 Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
X Trade Brokers vs. Alior Bank SA
Performance |
| Timeline |
| X Trade Brokers |
| Alior Bank SA |
X Trade and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Trade and Alior Bank
The main advantage of trading using opposite X Trade and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Trade position performs unexpectedly, Alior Bank 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 Alior Bank will offset losses from the drop in Alior Bank's long position.The idea behind X Trade Brokers and Alior Bank SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Alior Bank vs. SOFTWARE MANSION SPOLKA | Alior Bank vs. Noble Financials SA | Alior Bank vs. Quantum Software SA | Alior Bank vs. Enter Air 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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