Correlation Between X Trade and Novavis Group
Can any of the company-specific risk be diversified away by investing in both X Trade and Novavis Group 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 Novavis Group 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 Novavis Group SA, you can compare the effects of market volatilities on X Trade and Novavis Group 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 Novavis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Trade and Novavis Group.
Diversification Opportunities for X Trade and Novavis Group
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XTB and Novavis is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding X Trade Brokers and Novavis Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavis Group 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 Novavis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novavis Group SA has no effect on the direction of X Trade i.e., X Trade and Novavis Group go up and down completely randomly.
Pair Corralation between X Trade and Novavis Group
Assuming the 90 days trading horizon X Trade Brokers is expected to generate 1.03 times more return on investment than Novavis Group. However, X Trade is 1.03 times more volatile than Novavis Group SA. It trades about 0.24 of its potential returns per unit of risk. Novavis Group SA is currently generating about -0.17 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 Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
X Trade Brokers vs. Novavis Group SA
Performance |
| Timeline |
| X Trade Brokers |
| Novavis Group SA |
X Trade and Novavis Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Trade and Novavis Group
The main advantage of trading using opposite X Trade and Novavis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Trade position performs unexpectedly, Novavis Group 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 Novavis Group will offset losses from the drop in Novavis Group's long position.The idea behind X Trade Brokers and Novavis Group 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.| Novavis Group vs. Mercator Medical SA | Novavis Group vs. Echo Investment SA | Novavis Group vs. Tower Investments SA | Novavis Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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