Correlation Between X Trade and UniCredit SpA
Can any of the company-specific risk be diversified away by investing in both X Trade and UniCredit SpA 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 UniCredit SpA 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 UniCredit SpA, you can compare the effects of market volatilities on X Trade and UniCredit SpA 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 UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Trade and UniCredit SpA.
Diversification Opportunities for X Trade and UniCredit SpA
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XTB and UniCredit is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding X Trade Brokers and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA 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 UniCredit SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit SpA has no effect on the direction of X Trade i.e., X Trade and UniCredit SpA go up and down completely randomly.
Pair Corralation between X Trade and UniCredit SpA
Assuming the 90 days trading horizon X Trade Brokers is expected to generate 0.65 times more return on investment than UniCredit SpA. However, X Trade Brokers is 1.53 times less risky than UniCredit SpA. It trades about 0.24 of its potential returns per unit of risk. UniCredit SpA is currently generating about -0.22 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 | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
X Trade Brokers vs. UniCredit SpA
Performance |
| Timeline |
| X Trade Brokers |
| UniCredit SpA |
X Trade and UniCredit SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Trade and UniCredit SpA
The main advantage of trading using opposite X Trade and UniCredit SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Trade position performs unexpectedly, UniCredit SpA 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 UniCredit SpA will offset losses from the drop in UniCredit SpA's long position.The idea behind X Trade Brokers and UniCredit SpA 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.| UniCredit SpA vs. 3R Games SA | UniCredit SpA vs. Enter Air SA | UniCredit SpA vs. Mercator Medical SA | UniCredit SpA vs. Baked Games 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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