Correlation Between X Trade and Toya SA

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

Diversification Opportunities for X Trade and Toya SA

-0.45

Correlation Coefficient

X Trade  Toya SA

Very good diversification

The 3 months correlation between XTB and Toya is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding X Trade Brokers and Toya SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toya SA 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 Toya SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toya SA has no effect on the direction of X Trade i.e., X Trade and Toya SA go up and down completely randomly.

Pair Corralation between X Trade and Toya SA

Assuming the 90 days trading horizon X Trade Brokers is expected to generate 1.2 times more return on investment than Toya SA. However, X Trade is 1.2 times more volatile than Toya SA. It trades about 0.15 of its potential returns per unit of risk. Toya SA is currently generating about -0.02 per unit of risk. If you would invest  6,672  in X Trade Brokers on October 24, 2024 and sell it today you would earn a total of  1,068  from holding X Trade Brokers or generate 16.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.25%
Values	Daily Returns

X Trade Brokers  vs.  Toya 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.

Toya SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Toya SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Toya SA 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 Toya SA

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

The idea behind X Trade Brokers and Toya 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.