Correlation Between Cboe Global and Tradegate

Can any of the company-specific risk be diversified away by investing in both Cboe Global and Tradegate 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 Cboe Global and Tradegate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cboe Global Markets and Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on Cboe Global and Tradegate 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 Cboe Global with a short position of Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe Global and Tradegate.

Diversification Opportunities for Cboe Global and Tradegate

0.11

Correlation Coefficient

Cboe Global  Tradegate

Average diversification

The 3 months correlation between Cboe and Tradegate is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cboe Global Markets and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap and Cboe Global 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 Cboe Global Markets are associated (or correlated) with Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of Cboe Global i.e., Cboe Global and Tradegate go up and down completely randomly.

Pair Corralation between Cboe Global and Tradegate

Assuming the 90 days horizon Cboe Global Markets is expected to generate 0.97 times more return on investment than Tradegate. However, Cboe Global Markets is 1.03 times less risky than Tradegate. It trades about 0.05 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about -0.06 per unit of risk. If you would invest  16,736  in Cboe Global Markets on October 25, 2024 and sell it today you would earn a total of  2,044  from holding Cboe Global Markets or generate 12.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.52%
Values	Daily Returns

Cboe Global Markets  vs.  Tradegate AG Wertpapierhandels

Cboe Global Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cboe Global Markets has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cboe Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Tradegate AG Wertpap

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tradegate AG Wertpapierhandelsbank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Tradegate is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cboe Global and Tradegate

The main advantage of trading using opposite Cboe Global and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe Global position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.

The idea behind Cboe Global Markets and Tradegate AG Wertpapierhandelsbank 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.