Correlation Between MA Financial and EP Financial
Can any of the company-specific risk be diversified away by investing in both MA Financial and EP 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 MA Financial and EP Financial 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 EP Financial Group, you can compare the effects of market volatilities on MA Financial and EP 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 MA Financial with a short position of EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MA Financial and EP Financial.
Diversification Opportunities for MA Financial and EP Financial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MAF and EP1 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding MA Financial Group and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group 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 EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of MA Financial i.e., MA Financial and EP Financial go up and down completely randomly.
Pair Corralation between MA Financial and EP Financial
Assuming the 90 days trading horizon MA Financial Group is expected to generate 0.79 times more return on investment than EP Financial. However, MA Financial Group is 1.27 times less risky than EP Financial. It trades about 0.04 of its potential returns per unit of risk. EP Financial Group is currently generating about 0.02 per unit of risk. If you would invest 540.00 in MA Financial Group on September 4, 2024 and sell it today you would earn a total of 90.00 from holding MA Financial Group or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MA Financial Group vs. EP Financial Group
Performance |
| Timeline |
| MA Financial Group |
| EP Financial Group |
MA Financial and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MA Financial and EP Financial
The main advantage of trading using opposite MA Financial and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MA Financial position performs unexpectedly, EP 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 EP Financial will offset losses from the drop in EP Financial's long position.| MA Financial vs. Audio Pixels Holdings | MA Financial vs. Iodm | MA Financial vs. Nsx | MA Financial vs. TTG Fintech |
| EP Financial vs. Westpac Banking | EP Financial vs. Ecofibre | EP Financial vs. Adriatic Metals Plc | EP Financial vs. Australian Dairy Farms |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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