Correlation Between Investment Friends and MW Trade

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

By analyzing existing cross correlation between Investment Friends Capital and MW Trade SA, you can compare the effects of market volatilities on Investment Friends and MW 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 Investment Friends with a short position of MW Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment Friends and MW Trade.

Diversification Opportunities for Investment Friends and MW Trade

0.0

Correlation Coefficient

Investment Friends  MW Trade

Pay attention - limited upside

The 3 months correlation between Investment and MWT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Investment Friends Capital and MW Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MW Trade SA and Investment Friends 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 Investment Friends Capital are associated (or correlated) with MW Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MW Trade SA has no effect on the direction of Investment Friends i.e., Investment Friends and MW Trade go up and down completely randomly.

Pair Corralation between Investment Friends and MW Trade

If you would invest  308.00  in MW Trade SA on April 24, 2025 and sell it today you would earn a total of  32.00  from holding MW Trade SA or generate 10.39% return on investment over 90 days.

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

Investment Friends Capital  vs.  MW Trade SA

Investment Friends

Risk-Adjusted Performance

Very Weak

Over the last 90 days Investment Friends Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Investment Friends is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

MW Trade SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MW Trade SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, MW Trade reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Investment Friends and MW Trade

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

The idea behind Investment Friends Capital and MW Trade 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.