Correlation Between Carlson Investments and X Trade

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

By analyzing existing cross correlation between Carlson Investments SA and X Trade Brokers, you can compare the effects of market volatilities on Carlson Investments and X 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 Carlson Investments with a short position of X Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlson Investments and X Trade.

Diversification Opportunities for Carlson Investments and X Trade

-0.52

Correlation Coefficient

Carlson Investments  X Trade

Excellent diversification

The 3 months correlation between Carlson and XTB is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Carlson Investments SA and X Trade Brokers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Trade Brokers and Carlson Investments 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 Carlson Investments SA are associated (or correlated) with X Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Trade Brokers has no effect on the direction of Carlson Investments i.e., Carlson Investments and X Trade go up and down completely randomly.

Pair Corralation between Carlson Investments and X Trade

Assuming the 90 days trading horizon Carlson Investments SA is expected to generate 2.74 times more return on investment than X Trade. However, Carlson Investments is 2.74 times more volatile than X Trade Brokers. It trades about 0.08 of its potential returns per unit of risk. X Trade Brokers is currently generating about -0.01 per unit of risk. If you would invest  345.00  in Carlson Investments SA on December 21, 2024 and sell it today you would earn a total of  83.00  from holding Carlson Investments SA or generate 24.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Carlson Investments SA  vs.  X Trade Brokers

Carlson Investments

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carlson Investments SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Carlson Investments reported solid returns over the last few months and may actually be approaching a breakup point.

X Trade Brokers

Risk-Adjusted Performance

Very Weak

Over the last 90 days X Trade Brokers has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, X Trade is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Carlson Investments and X Trade

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

The idea behind Carlson Investments SA and X Trade Brokers 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.