Correlation Between X Trade and MW Trade
Can any of the company-specific risk be diversified away by investing in both X Trade 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 X Trade and MW Trade 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 MW Trade SA, you can compare the effects of market volatilities on X Trade 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 X Trade with a short position of MW Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Trade and MW Trade.
Diversification Opportunities for X Trade and MW Trade
Excellent diversification
The 3 months correlation between XTB and MWT is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding X Trade Brokers 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 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 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 X Trade i.e., X Trade and MW Trade go up and down completely randomly.
Pair Corralation between X Trade and MW Trade
Assuming the 90 days trading horizon X Trade Brokers is expected to generate 0.72 times more return on investment than MW Trade. However, X Trade Brokers is 1.38 times less risky than MW Trade. It trades about 0.17 of its potential returns per unit of risk. MW Trade SA is currently generating about -0.46 per unit of risk. If you would invest 6,726 in X Trade Brokers on September 4, 2024 and sell it today you would earn a total of 308.00 from holding X Trade Brokers or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Trade Brokers vs. MW Trade SA
Performance |
| Timeline |
| X Trade Brokers |
| MW Trade SA |
X Trade and MW Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Trade and MW Trade
The main advantage of trading using opposite X Trade and MW Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Trade 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.| X Trade vs. Novavis Group SA | X Trade vs. Asseco Business Solutions | X Trade vs. Kogeneracja SA | X Trade vs. Asseco South Eastern |
| MW Trade vs. X Trade Brokers | MW Trade vs. SOFTWARE MANSION SPOLKA | MW Trade vs. Quantum Software SA | MW Trade vs. Road Studio 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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