Correlation Between CNFinance Holdings and MCAN Mortgage
Can any of the company-specific risk be diversified away by investing in both CNFinance Holdings and MCAN Mortgage 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 CNFinance Holdings and MCAN Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNFinance Holdings and MCAN Mortgage, you can compare the effects of market volatilities on CNFinance Holdings and MCAN Mortgage 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 CNFinance Holdings with a short position of MCAN Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNFinance Holdings and MCAN Mortgage.
Diversification Opportunities for CNFinance Holdings and MCAN Mortgage
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CNFinance and MCAN is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CNFinance Holdings and MCAN Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCAN Mortgage and CNFinance Holdings 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 CNFinance Holdings are associated (or correlated) with MCAN Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCAN Mortgage has no effect on the direction of CNFinance Holdings i.e., CNFinance Holdings and MCAN Mortgage go up and down completely randomly.
Pair Corralation between CNFinance Holdings and MCAN Mortgage
Considering the 90-day investment horizon CNFinance Holdings is expected to under-perform the MCAN Mortgage. In addition to that, CNFinance Holdings is 2.66 times more volatile than MCAN Mortgage. It trades about -0.03 of its total potential returns per unit of risk. MCAN Mortgage is currently generating about 0.07 per unit of volatility. If you would invest 1,126 in MCAN Mortgage on September 12, 2024 and sell it today you would earn a total of 274.00 from holding MCAN Mortgage or generate 24.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 47.72% |
| Values | Daily Returns |
CNFinance Holdings vs. MCAN Mortgage
Performance |
| Timeline |
| CNFinance Holdings |
| MCAN Mortgage |
CNFinance Holdings and MCAN Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNFinance Holdings and MCAN Mortgage
The main advantage of trading using opposite CNFinance Holdings and MCAN Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNFinance Holdings position performs unexpectedly, MCAN Mortgage 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 MCAN Mortgage will offset losses from the drop in MCAN Mortgage's long position.| CNFinance Holdings vs. Security National Financial | CNFinance Holdings vs. Encore Capital Group | CNFinance Holdings vs. UWM Holdings Corp | CNFinance Holdings vs. Mr Cooper Group |
| MCAN Mortgage vs. Guild Holdings Co | MCAN Mortgage vs. Mr Cooper Group | MCAN Mortgage vs. Encore Capital Group | MCAN Mortgage vs. CNFinance Holdings |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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