Correlation Between Mlk Foods and X Trade

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

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

Diversification Opportunities for Mlk Foods and X Trade

-0.11

Correlation Coefficient

Mlk Foods  X Trade

Good diversification

The 3 months correlation between Mlk and XTB is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Mlk Foods Public 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 Mlk Foods 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 Mlk Foods Public 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 Mlk Foods i.e., Mlk Foods and X Trade go up and down completely randomly.

Pair Corralation between Mlk Foods and X Trade

Assuming the 90 days trading horizon Mlk Foods Public is expected to generate 1.92 times more return on investment than X Trade. However, Mlk Foods is 1.92 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 0.14 per unit of risk. If you would invest  63.00  in Mlk Foods Public on October 5, 2024 and sell it today you would earn a total of  63.00  from holding Mlk Foods Public or generate 100.0% return on investment over 90 days.

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

Mlk Foods Public  vs.  X Trade Brokers

Mlk Foods Public

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Mlk Foods Public has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Mlk Foods may actually be approaching a critical reversion point that can send shares even higher in February 2025.

X Trade Brokers

Risk-Adjusted Performance

0 of 100

Good

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 weak basic indicators, X Trade reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mlk Foods and X Trade

The main advantage of trading using opposite Mlk Foods and X Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mlk Foods 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 Mlk Foods Public 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.