Correlation Between X Trade and Dom Development
Can any of the company-specific risk be diversified away by investing in both X Trade and Dom Development 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 Dom Development 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 Dom Development SA, you can compare the effects of market volatilities on X Trade and Dom Development 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 Dom Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Trade and Dom Development.
Diversification Opportunities for X Trade and Dom Development
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XTB and Dom is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding X Trade Brokers and Dom Development SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dom Development 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 Dom Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dom Development SA has no effect on the direction of X Trade i.e., X Trade and Dom Development go up and down completely randomly.
Pair Corralation between X Trade and Dom Development
Assuming the 90 days trading horizon X Trade is expected to generate 1.28 times less return on investment than Dom Development. In addition to that, X Trade is 1.05 times more volatile than Dom Development SA. It trades about 0.12 of its total potential returns per unit of risk. Dom Development SA is currently generating about 0.16 per unit of volatility. If you would invest 17,440 in Dom Development SA on September 4, 2024 and sell it today you would earn a total of 2,960 from holding Dom Development SA or generate 16.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Trade Brokers vs. Dom Development SA
Performance |
| Timeline |
| X Trade Brokers |
| Dom Development SA |
X Trade and Dom Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Trade and Dom Development
The main advantage of trading using opposite X Trade and Dom Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Trade position performs unexpectedly, Dom Development 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 Dom Development will offset losses from the drop in Dom Development's long position.| X Trade vs. Novavis Group SA | X Trade vs. Asseco Business Solutions | X Trade vs. Kogeneracja SA | X Trade vs. Asseco South Eastern |
| Dom Development vs. Skyline Investment SA | Dom Development vs. X Trade Brokers | Dom Development vs. Mlk Foods Public | Dom Development 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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