Correlation Between Exchange Bankshares and MQGAU

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

By analyzing existing cross correlation between Exchange Bankshares and MQGAU 5376057 23 SEP 27, you can compare the effects of market volatilities on Exchange Bankshares and MQGAU 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 Exchange Bankshares with a short position of MQGAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Bankshares and MQGAU.

Diversification Opportunities for Exchange Bankshares and MQGAU

-0.48

Correlation Coefficient

Exchange Bankshares  MQGAU

Very good diversification

The 3 months correlation between Exchange and MQGAU is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Bankshares and MQGAU 5376057 23 SEP 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MQGAU 5376057 23 and Exchange Bankshares 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 Exchange Bankshares are associated (or correlated) with MQGAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MQGAU 5376057 23 has no effect on the direction of Exchange Bankshares i.e., Exchange Bankshares and MQGAU go up and down completely randomly.

Pair Corralation between Exchange Bankshares and MQGAU

Given the investment horizon of 90 days Exchange Bankshares is expected to generate 4.33 times more return on investment than MQGAU. However, Exchange Bankshares is 4.33 times more volatile than MQGAU 5376057 23 SEP 27. It trades about 0.58 of its potential returns per unit of risk. MQGAU 5376057 23 SEP 27 is currently generating about -0.05 per unit of risk. If you would invest  4,775  in Exchange Bankshares on December 23, 2024 and sell it today you would earn a total of  15.00  from holding Exchange Bankshares or generate 0.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	23.08%
Values	Daily Returns

Exchange Bankshares  vs.  MQGAU 5376057 23 SEP 27

Exchange Bankshares

Risk-Adjusted Performance

Excellent

Over the last 90 days Exchange Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak fundamental indicators, Exchange Bankshares may actually be approaching a critical reversion point that can send shares even higher in April 2025.

MQGAU 5376057 23

Risk-Adjusted Performance

Very Weak

Over the last 90 days MQGAU 5376057 23 SEP 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MQGAU is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Exchange Bankshares and MQGAU

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

The idea behind Exchange Bankshares and MQGAU 5376057 23 SEP 27 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.