Correlation Between Latitude Financial and MA Financial
Can any of the company-specific risk be diversified away by investing in both Latitude 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 Latitude 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 Latitude Financial Services and MA Financial Group, you can compare the effects of market volatilities on Latitude 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 Latitude Financial with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Latitude Financial and MA Financial.
Diversification Opportunities for Latitude Financial and MA Financial
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Latitude and MAF is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Latitude Financial Services 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 Latitude 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 Latitude Financial Services 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 Latitude Financial i.e., Latitude Financial and MA Financial go up and down completely randomly.
Pair Corralation between Latitude Financial and MA Financial
Assuming the 90 days trading horizon Latitude Financial Services is expected to under-perform the MA Financial. But the stock apears to be less risky and, when comparing its historical volatility, Latitude Financial Services is 3.03 times less risky than MA Financial. The stock trades about -0.01 of its potential returns per unit of risk. The MA Financial Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 508.00 in MA Financial Group on September 12, 2024 and sell it today you would earn a total of 106.00 from holding MA Financial Group or generate 20.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Latitude Financial Services vs. MA Financial Group
Performance |
| Timeline |
| Latitude Financial |
| MA Financial Group |
Latitude Financial and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Latitude Financial and MA Financial
The main advantage of trading using opposite Latitude Financial and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Latitude 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.| Latitude Financial vs. Aneka Tambang Tbk | Latitude Financial vs. Commonwealth Bank | Latitude Financial vs. BHP Group Limited | Latitude Financial vs. Rio Tinto |
| MA Financial vs. Australian Agricultural | MA Financial vs. EMvision Medical Devices | MA Financial vs. Genetic Technologies | MA Financial vs. WiseTech Global Limited |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |