Correlation Between Microequities Asset and MA Financial
Can any of the company-specific risk be diversified away by investing in both Microequities Asset and MA 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 Microequities Asset and MA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microequities Asset Management and MA Financial Group, you can compare the effects of market volatilities on Microequities Asset and MA 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 Microequities Asset with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microequities Asset and MA Financial.
Diversification Opportunities for Microequities Asset and MA Financial
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microequities and MAF is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Microequities Asset Management and MA Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MA Financial Group and Microequities Asset 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 Microequities Asset Management are associated (or correlated) with MA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MA Financial Group has no effect on the direction of Microequities Asset i.e., Microequities Asset and MA Financial go up and down completely randomly.
Pair Corralation between Microequities Asset and MA Financial
Assuming the 90 days trading horizon Microequities Asset is expected to generate 9.55 times less return on investment than MA Financial. In addition to that, Microequities Asset is 1.17 times more volatile than MA Financial Group. It trades about 0.0 of its total potential returns per unit of risk. MA Financial Group is currently generating about 0.03 per unit of volatility. If you would invest 508.00 in MA Financial Group on September 12, 2024 and sell it today you would earn a total of 106.00 from holding MA Financial Group or generate 20.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microequities Asset Management vs. MA Financial Group
Performance |
| Timeline |
| Microequities Asset |
| MA Financial Group |
Microequities Asset and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microequities Asset and MA Financial
The main advantage of trading using opposite Microequities Asset and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microequities Asset position performs unexpectedly, MA 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 MA Financial will offset losses from the drop in MA Financial's long position.| Microequities Asset vs. Aneka Tambang Tbk | Microequities Asset vs. Commonwealth Bank | Microequities Asset vs. BHP Group Limited | Microequities Asset vs. Rio Tinto |
| MA Financial vs. Australian Agricultural | MA Financial vs. EMvision Medical Devices | MA Financial vs. Genetic Technologies | MA Financial vs. WiseTech Global Limited |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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