Correlation Between Credit Corp and MA Financial
Can any of the company-specific risk be diversified away by investing in both Credit Corp and MA Financial 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 Credit Corp and MA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Corp Group and MA Financial Group, you can compare the effects of market volatilities on Credit Corp and MA Financial 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 Credit Corp with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Corp and MA Financial.
Diversification Opportunities for Credit Corp and MA Financial
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Credit and MAF is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Credit Corp Group and MA Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MA Financial Group and Credit Corp 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 Credit Corp Group are associated (or correlated) with MA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MA Financial Group has no effect on the direction of Credit Corp i.e., Credit Corp and MA Financial go up and down completely randomly.
Pair Corralation between Credit Corp and MA Financial
Assuming the 90 days trading horizon Credit Corp is expected to generate 4.72 times less return on investment than MA Financial. In addition to that, Credit Corp is 1.06 times more volatile than MA Financial Group. It trades about 0.01 of its total potential returns per unit of risk. MA Financial Group is currently generating about 0.05 per unit of volatility. If you would invest 421.00 in MA Financial Group on September 4, 2024 and sell it today you would earn a total of 209.00 from holding MA Financial Group or generate 49.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Corp Group vs. MA Financial Group
Performance |
| Timeline |
| Credit Corp Group |
| MA Financial Group |
Credit Corp and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Corp and MA Financial
The main advantage of trading using opposite Credit Corp and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Corp position performs unexpectedly, MA Financial 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 MA Financial will offset losses from the drop in MA Financial's long position.| Credit Corp vs. Macquarie Group | Credit Corp vs. Rio Tinto | Credit Corp vs. CSL | Credit Corp vs. Commonwealth Bank of |
| MA Financial vs. Audio Pixels Holdings | MA Financial vs. Iodm | MA Financial vs. Nsx | MA Financial vs. TTG Fintech |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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