Correlation Between MA Financial and Latitude Financial
Can any of the company-specific risk be diversified away by investing in both MA Financial and Latitude 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 Latitude 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 Latitude Financial Services, you can compare the effects of market volatilities on MA Financial and Latitude 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 Latitude Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MA Financial and Latitude Financial.
Diversification Opportunities for MA Financial and Latitude Financial
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAF and Latitude is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding MA Financial Group and Latitude Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latitude Financial 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 Latitude Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latitude Financial has no effect on the direction of MA Financial i.e., MA Financial and Latitude Financial go up and down completely randomly.
Pair Corralation between MA Financial and Latitude Financial
Assuming the 90 days trading horizon MA Financial Group is expected to generate 2.88 times more return on investment than Latitude Financial. However, MA Financial is 2.88 times more volatile than Latitude Financial Services. It trades about 0.12 of its potential returns per unit of risk. Latitude Financial Services is currently generating about 0.0 per unit of risk. If you would invest 436.00 in MA Financial Group on September 13, 2024 and sell it today you would earn a total of 164.00 from holding MA Financial Group or generate 37.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MA Financial Group vs. Latitude Financial Services
Performance |
| Timeline |
| MA Financial Group |
| Latitude Financial |
MA Financial and Latitude Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MA Financial and Latitude Financial
The main advantage of trading using opposite MA Financial and Latitude Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MA Financial position performs unexpectedly, Latitude 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 Latitude Financial will offset losses from the drop in Latitude Financial's long position.| MA Financial vs. Westpac Banking | MA Financial vs. National Australia Bank | MA Financial vs. National Australia Bank | MA Financial vs. National Australia Bank |
| Latitude Financial vs. Aneka Tambang Tbk | Latitude Financial vs. Commonwealth Bank | Latitude Financial vs. BHP Group Limited | Latitude Financial vs. Rio Tinto |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |