Correlation Between Malaga Financial and Capital Income
Can any of the company-specific risk be diversified away by investing in both Malaga Financial and Capital Income 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 Malaga Financial and Capital Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malaga Financial and Capital Income Builder, you can compare the effects of market volatilities on Malaga Financial and Capital Income 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 Malaga Financial with a short position of Capital Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malaga Financial and Capital Income.
Diversification Opportunities for Malaga Financial and Capital Income
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Malaga and Capital is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Malaga Financial and Capital Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Income Builder and Malaga 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 Malaga Financial are associated (or correlated) with Capital Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Income Builder has no effect on the direction of Malaga Financial i.e., Malaga Financial and Capital Income go up and down completely randomly.
Pair Corralation between Malaga Financial and Capital Income
Given the investment horizon of 90 days Malaga Financial is expected to generate 15.27 times less return on investment than Capital Income. In addition to that, Malaga Financial is 1.99 times more volatile than Capital Income Builder. It trades about 0.0 of its total potential returns per unit of risk. Capital Income Builder is currently generating about 0.14 per unit of volatility. If you would invest 6,739 in Capital Income Builder on September 1, 2024 and sell it today you would earn a total of 590.00 from holding Capital Income Builder or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.85% |
| Values | Daily Returns |
Malaga Financial vs. Capital Income Builder
Performance |
| Timeline |
| Malaga Financial |
| Capital Income Builder |
Malaga Financial and Capital Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malaga Financial and Capital Income
The main advantage of trading using opposite Malaga Financial and Capital Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malaga Financial position performs unexpectedly, Capital Income 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 Capital Income will offset losses from the drop in Capital Income's long position.| Malaga Financial vs. MF Bancorp | Malaga Financial vs. United Bancorporation of | Malaga Financial vs. Harbor Bankshares | Malaga Financial vs. BankFirst Capital |
| Capital Income vs. Income Fund Of | Capital Income vs. New World Fund | Capital Income vs. American Mutual Fund | Capital Income vs. American Mutual Fund |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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