Correlation Between Gtn and MA Financial
Can any of the company-specific risk be diversified away by investing in both Gtn 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 Gtn and MA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gtn and MA Financial Group, you can compare the effects of market volatilities on Gtn 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 Gtn with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gtn and MA Financial.
Diversification Opportunities for Gtn and MA Financial
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gtn and MAF is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gtn 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 Gtn 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 Gtn 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 Gtn i.e., Gtn and MA Financial go up and down completely randomly.
Pair Corralation between Gtn and MA Financial
Assuming the 90 days trading horizon Gtn is expected to generate 0.87 times more return on investment than MA Financial. However, Gtn is 1.15 times less risky than MA Financial. It trades about 0.13 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 57.00 in Gtn on October 10, 2024 and sell it today you would earn a total of 3.00 from holding Gtn or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gtn vs. MA Financial Group
Performance |
| Timeline |
| Gtn |
| MA Financial Group |
Gtn and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gtn and MA Financial
The main advantage of trading using opposite Gtn and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gtn 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.The idea behind Gtn and MA Financial Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MA Financial vs. Kip McGrath Education | MA Financial vs. Home Consortium | MA Financial vs. Pinnacle Investment Management | MA Financial vs. Ainsworth Game Technology |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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