Correlation Between MA Financial and Aruma Resources
Can any of the company-specific risk be diversified away by investing in both MA Financial and Aruma Resources 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 MA Financial and Aruma Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MA Financial Group and Aruma Resources, you can compare the effects of market volatilities on MA Financial and Aruma Resources 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 MA Financial with a short position of Aruma Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of MA Financial and Aruma Resources.
Diversification Opportunities for MA Financial and Aruma Resources
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAF and Aruma is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding MA Financial Group and Aruma Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aruma Resources and MA 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 MA Financial Group are associated (or correlated) with Aruma Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aruma Resources has no effect on the direction of MA Financial i.e., MA Financial and Aruma Resources go up and down completely randomly.
Pair Corralation between MA Financial and Aruma Resources
Assuming the 90 days trading horizon MA Financial Group is expected to generate 0.29 times more return on investment than Aruma Resources. However, MA Financial Group is 3.48 times less risky than Aruma Resources. It trades about -0.17 of its potential returns per unit of risk. Aruma Resources is currently generating about -0.07 per unit of risk. If you would invest 656.00 in MA Financial Group on September 14, 2024 and sell it today you would lose (46.00) from holding MA Financial Group or give up 7.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MA Financial Group vs. Aruma Resources
Performance |
| Timeline |
| MA Financial Group |
| Aruma Resources |
MA Financial and Aruma Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MA Financial and Aruma Resources
The main advantage of trading using opposite MA Financial and Aruma Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MA Financial position performs unexpectedly, Aruma Resources 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 Aruma Resources will offset losses from the drop in Aruma Resources' long position.| MA Financial vs. Perseus Mining | MA Financial vs. Stelar Metals | MA Financial vs. MetalsGrove Mining | MA Financial vs. Farm Pride Foods |
| Aruma Resources vs. Medical Developments International | Aruma Resources vs. BKI Investment | Aruma Resources vs. Carlton Investments | Aruma Resources vs. Sandon Capital Investments |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |