Correlation Between CFG BANK and MAROC LEASING

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

Diversification Opportunities for CFG BANK and MAROC LEASING

CFGMAROCDiversified AwayCFGMAROCDiversified Away100%
-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between CFG and MAROC is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding CFG BANK and MAROC LEASING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAROC LEASING and CFG BANK 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 CFG BANK are associated (or correlated) with MAROC LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAROC LEASING has no effect on the direction of CFG BANK i.e., CFG BANK and MAROC LEASING go up and down completely randomly.

Pair Corralation between CFG BANK and MAROC LEASING

Assuming the 90 days trading horizon CFG BANK is expected to under-perform the MAROC LEASING. But the stock apears to be less risky and, when comparing its historical volatility, CFG BANK is 1.46 times less risky than MAROC LEASING. The stock trades about -0.08 of its potential returns per unit of risk. The MAROC LEASING is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  37,000  in MAROC LEASING on December 3, 2024 and sell it today you would earn a total of  1,600  from holding MAROC LEASING or generate 4.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CFG BANK  vs.  MAROC LEASING

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505101520
JavaScript chart by amCharts 3.21.15CFG-BANK MAROC-LEASING
       Timeline  
CFG BANK 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CFG BANK are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental drivers, CFG BANK displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFebMar210220230240250
MAROC LEASING 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days MAROC LEASING has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, MAROC LEASING is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15JanFebFebMar370375380385390395

CFG BANK and MAROC LEASING Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.76-2.81-1.87-0.930.01.02.043.074.115.14 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15CFG-BANK MAROC-LEASING
       Returns  

Pair Trading with CFG BANK and MAROC LEASING

The main advantage of trading using opposite CFG BANK and MAROC LEASING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFG BANK position performs unexpectedly, MAROC LEASING 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 MAROC LEASING will offset losses from the drop in MAROC LEASING's long position.
The idea behind CFG BANK and MAROC LEASING 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.
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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