Correlation Between Matson Money and Transamerica Financial
Can any of the company-specific risk be diversified away by investing in both Matson Money and Transamerica 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 Matson Money and Transamerica Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Equity and Transamerica Financial Life, you can compare the effects of market volatilities on Matson Money and Transamerica 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 Matson Money with a short position of Transamerica Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Transamerica Financial.
Diversification Opportunities for Matson Money and Transamerica Financial
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Matson and Transamerica is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Transamerica Financial Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Financial 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 Equity are associated (or correlated) with Transamerica Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Financial has no effect on the direction of Matson Money i.e., Matson Money and Transamerica Financial go up and down completely randomly.
Pair Corralation between Matson Money and Transamerica Financial
Assuming the 90 days horizon Matson Money Equity is expected to generate 1.5 times more return on investment than Transamerica Financial. However, Matson Money is 1.5 times more volatile than Transamerica Financial Life. It trades about 0.16 of its potential returns per unit of risk. Transamerica Financial Life is currently generating about 0.13 per unit of risk. If you would invest 3,426 in Matson Money Equity on September 3, 2024 and sell it today you would earn a total of 348.00 from holding Matson Money Equity or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matson Money Equity vs. Transamerica Financial Life
Performance |
| Timeline |
| Matson Money Equity |
| Transamerica Financial |
Matson Money and Transamerica Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and Transamerica Financial
The main advantage of trading using opposite Matson Money and Transamerica Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Transamerica 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 Transamerica Financial will offset losses from the drop in Transamerica Financial's long position.| Matson Money vs. Goldman Sachs Growth | Matson Money vs. Small Pany Growth | Matson Money vs. Rational Defensive Growth | Matson Money vs. William Blair Growth |
| Transamerica Financial vs. Aig Government Money | Transamerica Financial vs. John Hancock Money | Transamerica Financial vs. First American Funds | Transamerica Financial vs. Matson Money Equity |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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