Correlation Between MA Financial and Prime Financial
Can any of the company-specific risk be diversified away by investing in both MA Financial and Prime 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 Prime 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 Prime Financial Group, you can compare the effects of market volatilities on MA Financial and Prime 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 Prime Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MA Financial and Prime Financial.
Diversification Opportunities for MA Financial and Prime Financial
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MAF and Prime is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding MA Financial Group and Prime Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime 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 Prime Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Financial Group has no effect on the direction of MA Financial i.e., MA Financial and Prime Financial go up and down completely randomly.
Pair Corralation between MA Financial and Prime Financial
Assuming the 90 days trading horizon MA Financial Group is expected to generate 0.69 times more return on investment than Prime Financial. However, MA Financial Group is 1.45 times less risky than Prime Financial. It trades about 0.11 of its potential returns per unit of risk. Prime Financial Group is currently generating about 0.03 per unit of risk. If you would invest 442.00 in MA Financial Group on August 25, 2024 and sell it today you would earn a total of 218.00 from holding MA Financial Group or generate 49.32% 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. Prime Financial Group
Performance |
| Timeline |
| MA Financial Group |
| Prime Financial Group |
MA Financial and Prime Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MA Financial and Prime Financial
The main advantage of trading using opposite MA Financial and Prime Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MA Financial position performs unexpectedly, Prime 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 Prime Financial will offset losses from the drop in Prime Financial's long position.| MA Financial vs. Genetic Technologies | MA Financial vs. Charter Hall Retail | MA Financial vs. RLF AgTech | MA Financial vs. Advanced Braking Technology |
| Prime Financial vs. Hudson Investment Group | Prime Financial vs. Sonic Healthcare | Prime Financial vs. Singular Health Group | Prime Financial vs. Auctus Alternative 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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