Correlation Between CSL and MA Financial
Can any of the company-specific risk be diversified away by investing in both CSL 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 CSL and MA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL and MA Financial Group, you can compare the effects of market volatilities on CSL 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 CSL with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and MA Financial.
Diversification Opportunities for CSL and MA Financial
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CSL and MAF is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding CSL 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 CSL 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 CSL 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 CSL i.e., CSL and MA Financial go up and down completely randomly.
Pair Corralation between CSL and MA Financial
Assuming the 90 days trading horizon CSL is expected to generate 0.53 times more return on investment than MA Financial. However, CSL is 1.89 times less risky than MA Financial. It trades about 0.01 of its potential returns per unit of risk. MA Financial Group is currently generating about -0.03 per unit of risk. If you would invest 28,162 in CSL on September 2, 2024 and sell it today you would earn a total of 60.00 from holding CSL or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSL vs. MA Financial Group
Performance |
| Timeline |
| CSL |
| MA Financial Group |
CSL and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and MA Financial
The main advantage of trading using opposite CSL and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL 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.| CSL vs. REGAL ASIAN INVESTMENTS | CSL vs. Argo Investments | CSL vs. Hudson Investment Group | CSL vs. Mayfield Childcare |
| MA Financial vs. Inventis | MA Financial vs. Pengana Private Equity | MA Financial vs. PM Capital Global | MA Financial vs. Macquarie Group Ltd |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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