This module allows you to analyze existing cross correlation between Taiwan Wtd and Madrid Gnrl. You can compare the effects of market volatilities on Taiwan Wtd and Madrid Gnrl 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 Taiwan Wtd with a short position of Madrid Gnrl. See also your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Wtd and Madrid Gnrl.
|Horizon||30 Days Login to change|
Predicted Return Density
Taiwan Wtd vs. Madrid Gnrl
Assuming 30 trading days horizon, Taiwan Wtd is expected to under-perform the Madrid Gnrl. In addition to that, Taiwan Wtd is 1.04 times more volatile than Madrid Gnrl. It trades about -0.15 of its total potential returns per unit of risk. Madrid Gnrl is currently generating about -0.12 per unit of volatility. If you would invest 96,271 in Madrid Gnrl on May 17, 2019 and sell it today you would lose (3,609) from holding Madrid Gnrl or give up 3.75% of portfolio value over 30 days.
Pair Corralation between Taiwan Wtd and Madrid Gnrl
|Time Period||2 Months [change]|
Diversification Opportunities for Taiwan Wtd and Madrid Gnrl
Very weak diversification
Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Wtd and Madrid Gnrl in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Madrid Gnrl and Taiwan Wtd 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 Taiwan Wtd are associated (or correlated) with Madrid Gnrl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madrid Gnrl has no effect on the direction of Taiwan Wtd i.e. Taiwan Wtd and Madrid Gnrl go up and down completely randomly.
See also your portfolio center. Please also try Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.