Correlation Between Energy Resources and MA Financial
Can any of the company-specific risk be diversified away by investing in both Energy Resources 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 Energy Resources and MA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Resources and MA Financial Group, you can compare the effects of market volatilities on Energy Resources 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 Energy Resources with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Resources and MA Financial.
Diversification Opportunities for Energy Resources and MA Financial
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Energy and MAF is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Energy Resources 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 Energy Resources 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 Energy Resources 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 Energy Resources i.e., Energy Resources and MA Financial go up and down completely randomly.
Pair Corralation between Energy Resources and MA Financial
Assuming the 90 days trading horizon Energy Resources is expected to generate 1.5 times less return on investment than MA Financial. In addition to that, Energy Resources is 4.94 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 0.04 per unit of volatility. If you would invest 426.00 in MA Financial Group on September 2, 2024 and sell it today you would earn a total of 195.00 from holding MA Financial Group or generate 45.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Resources vs. MA Financial Group
Performance |
| Timeline |
| Energy Resources |
| MA Financial Group |
Energy Resources and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Resources and MA Financial
The main advantage of trading using opposite Energy Resources and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Resources 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.| Energy Resources vs. Westpac Banking | Energy Resources vs. ABACUS STORAGE KING | Energy Resources vs. Odyssey Energy | Energy Resources vs. Imricor Medical Systems |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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