Correlation Between X Trade and Drago Entertainment

Can any of the company-specific risk be diversified away by investing in both X Trade and Drago Entertainment 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 Drago Entertainment 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 Drago entertainment SA, you can compare the effects of market volatilities on X Trade and Drago Entertainment 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 Drago Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Trade and Drago Entertainment.

Diversification Opportunities for X Trade and Drago Entertainment

-0.25

Correlation Coefficient

X Trade  Drago Entertainment

Very good diversification

The 3 months correlation between XTB and Drago is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding X Trade Brokers and Drago entertainment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drago entertainment 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 Drago Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drago entertainment has no effect on the direction of X Trade i.e., X Trade and Drago Entertainment go up and down completely randomly.

Pair Corralation between X Trade and Drago Entertainment

Assuming the 90 days trading horizon X Trade Brokers is expected to generate 0.69 times more return on investment than Drago Entertainment. However, X Trade Brokers is 1.46 times less risky than Drago Entertainment. It trades about 0.11 of its potential returns per unit of risk. Drago entertainment SA is currently generating about -0.04 per unit of risk. If you would invest  2,560  in X Trade Brokers on October 24, 2024 and sell it today you would earn a total of  5,188  from holding X Trade Brokers or generate 202.66% return on investment over 90 days.

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

X Trade Brokers  vs.  Drago entertainment SA

X Trade Brokers

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in X Trade Brokers are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, X Trade reported solid returns over the last few months and may actually be approaching a breakup point.

Drago entertainment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Drago entertainment SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Drago Entertainment 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 X Trade and Drago Entertainment

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

The idea behind X Trade Brokers and Drago entertainment SA 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.