Correlation Between Matson Money and Cref Money
Can any of the company-specific risk be diversified away by investing in both Matson Money and Cref Money 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 Matson Money and Cref Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Fixed and Cref Money Market, you can compare the effects of market volatilities on Matson Money and Cref Money 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 Matson Money with a short position of Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Cref Money.
Diversification Opportunities for Matson Money and Cref Money
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Matson and Cref is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Fixed and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market and Matson Money 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 Matson Money Fixed are associated (or correlated) with Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Matson Money i.e., Matson Money and Cref Money go up and down completely randomly.
Pair Corralation between Matson Money and Cref Money
Assuming the 90 days horizon Matson Money Fixed is expected to under-perform the Cref Money. In addition to that, Matson Money is 6.57 times more volatile than Cref Money Market. It trades about -0.02 of its total potential returns per unit of risk. Cref Money Market is currently generating about 1.04 per unit of volatility. If you would invest 2,950 in Cref Money Market on September 3, 2024 and sell it today you would earn a total of 22.00 from holding Cref Money Market or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matson Money Fixed vs. Cref Money Market
Performance |
| Timeline |
| Matson Money Fixed |
| Cref Money Market |
Matson Money and Cref Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and Cref Money
The main advantage of trading using opposite Matson Money and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Cref Money 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 Cref Money will offset losses from the drop in Cref Money's long position.| Matson Money vs. Sentinel Small Pany | Matson Money vs. Davenport Small Cap | Matson Money vs. T Rowe Price | Matson Money vs. Tax Managed Mid Small |
| Cref Money vs. Health Biotchnology Portfolio | Cref Money vs. Health Biotchnology Portfolio | Cref Money vs. Lord Abbett Health | Cref Money vs. Allianzgi Health Sciences |
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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