Correlation Between MA Financial and Mayfield Childcare
Can any of the company-specific risk be diversified away by investing in both MA Financial and Mayfield Childcare 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 Mayfield Childcare 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 Mayfield Childcare, you can compare the effects of market volatilities on MA Financial and Mayfield Childcare 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 Mayfield Childcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of MA Financial and Mayfield Childcare.
Diversification Opportunities for MA Financial and Mayfield Childcare
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAF and Mayfield is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding MA Financial Group and Mayfield Childcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfield Childcare 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 Mayfield Childcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfield Childcare has no effect on the direction of MA Financial i.e., MA Financial and Mayfield Childcare go up and down completely randomly.
Pair Corralation between MA Financial and Mayfield Childcare
Assuming the 90 days trading horizon MA Financial Group is expected to under-perform the Mayfield Childcare. But the stock apears to be less risky and, when comparing its historical volatility, MA Financial Group is 1.14 times less risky than Mayfield Childcare. The stock trades about -0.27 of its potential returns per unit of risk. The Mayfield Childcare is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 54.00 in Mayfield Childcare on September 18, 2024 and sell it today you would lose (5.00) from holding Mayfield Childcare or give up 9.26% 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. Mayfield Childcare
Performance |
| Timeline |
| MA Financial Group |
| Mayfield Childcare |
MA Financial and Mayfield Childcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MA Financial and Mayfield Childcare
The main advantage of trading using opposite MA Financial and Mayfield Childcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MA Financial position performs unexpectedly, Mayfield Childcare 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 Mayfield Childcare will offset losses from the drop in Mayfield Childcare's long position.| MA Financial vs. REGAL ASIAN INVESTMENTS | MA Financial vs. Diversified United Investment | MA Financial vs. Centuria Industrial Reit | MA Financial vs. Argo Investments |
| Mayfield Childcare vs. Macquarie Group | Mayfield Childcare vs. Rio Tinto | Mayfield Childcare vs. CSL | Mayfield Childcare vs. Commonwealth Bank of |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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