Correlation Between Finexia Financial and MA Financial
Can any of the company-specific risk be diversified away by investing in both Finexia Financial 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 Finexia Financial and MA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finexia Financial Group and MA Financial Group, you can compare the effects of market volatilities on Finexia Financial 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 Finexia Financial with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and MA Financial.
Diversification Opportunities for Finexia Financial and MA Financial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finexia and MAF is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group 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 Finexia Financial 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 Finexia Financial Group 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 Finexia Financial i.e., Finexia Financial and MA Financial go up and down completely randomly.
Pair Corralation between Finexia Financial and MA Financial
Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 1.5 times more return on investment than MA Financial. However, Finexia Financial is 1.5 times more volatile than MA Financial Group. It trades about 0.26 of its potential returns per unit of risk. MA Financial Group is currently generating about -0.04 per unit of risk. If you would invest 26.00 in Finexia Financial Group on August 30, 2024 and sell it today you would earn a total of 5.00 from holding Finexia Financial Group or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finexia Financial Group vs. MA Financial Group
Performance |
| Timeline |
| Finexia Financial |
| MA Financial Group |
Finexia Financial and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and MA Financial
The main advantage of trading using opposite Finexia Financial and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial 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.| Finexia Financial vs. Qbe Insurance Group | Finexia Financial vs. Ora Banda Mining | Finexia Financial vs. Wt Financial Group | Finexia Financial vs. Prime Financial Group |
| MA Financial vs. Nova Eye Medical | MA Financial vs. Charter Hall Education | MA Financial vs. ABACUS STORAGE KING | MA Financial vs. Alto Metals |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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