Correlation Between MRM SA and Argan SA
Can any of the company-specific risk be diversified away by investing in both MRM SA and Argan SA 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 MRM SA and Argan SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MRM SA and Argan SA, you can compare the effects of market volatilities on MRM SA and Argan SA 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 MRM SA with a short position of Argan SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRM SA and Argan SA.
Diversification Opportunities for MRM SA and Argan SA
Pay attention - limited upside
The 3 months correlation between MRM and Argan is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding MRM SA and Argan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argan SA and MRM SA 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 MRM SA are associated (or correlated) with Argan SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argan SA has no effect on the direction of MRM SA i.e., MRM SA and Argan SA go up and down completely randomly.
Pair Corralation between MRM SA and Argan SA
Assuming the 90 days trading horizon MRM SA is expected to generate 0.12 times more return on investment than Argan SA. However, MRM SA is 8.08 times less risky than Argan SA. It trades about 0.32 of its potential returns per unit of risk. Argan SA is currently generating about -0.13 per unit of risk. If you would invest 3,511 in MRM SA on August 31, 2024 and sell it today you would earn a total of 39.00 from holding MRM SA or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MRM SA vs. Argan SA
Performance |
| Timeline |
| MRM SA |
| Argan SA |
MRM SA and Argan SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRM SA and Argan SA
The main advantage of trading using opposite MRM SA and Argan SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRM SA position performs unexpectedly, Argan SA 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 Argan SA will offset losses from the drop in Argan SA's long position.| MRM SA vs. Groupe Partouche SA | MRM SA vs. Fonciere Inea | MRM SA vs. Patrimoine et Commerce | MRM SA vs. Societe de la |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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