Correlation Between Plus500 and Better Choice

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Plus500 and Better Choice 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 Plus500 and Better Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plus500 and Better Choice, you can compare the effects of market volatilities on Plus500 and Better Choice 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 Plus500 with a short position of Better Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plus500 and Better Choice.

Diversification Opportunities for Plus500 and Better Choice

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between Plus500 and Better is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Plus500 and Better Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better Choice and Plus500 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 Plus500 are associated (or correlated) with Better Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better Choice has no effect on the direction of Plus500 i.e., Plus500 and Better Choice go up and down completely randomly.

Pair Corralation between Plus500 and Better Choice

Assuming the 90 days horizon Plus500 is expected to generate 2.81 times less return on investment than Better Choice. But when comparing it to its historical volatility, Plus500 is 3.0 times less risky than Better Choice. It trades about 0.22 of its potential returns per unit of risk. Better Choice is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  190.00  in Better Choice on May 11, 2022 and sell it today you would earn a total of  53.00  from holding Better Choice or generate 27.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Plus500  vs.  Better Choice

 Performance (%) 
       Timeline  
Plus500 
Plus500 Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Plus500 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Plus500 exhibited solid returns over the last few months and may actually be approaching a breakup point.

Plus500 Price Channel

Better Choice 
Better Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Better Choice are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Better Choice reported solid returns over the last few months and may actually be approaching a breakup point.

Better Price Channel

Plus500 and Better Choice Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Plus500 and Better Choice

The main advantage of trading using opposite Plus500 and Better Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plus500 position performs unexpectedly, Better Choice 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 Better Choice will offset losses from the drop in Better Choice's long position.
The idea behind Plus500 and Better Choice 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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go