Correlation Between MUA and CIM FINANCIAL
Can any of the company-specific risk be diversified away by investing in both MUA and CIM 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 MUA and CIM FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MUA LTD and CIM FINANCIAL SERVICES, you can compare the effects of market volatilities on MUA and CIM 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 MUA with a short position of CIM FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MUA and CIM FINANCIAL.
Diversification Opportunities for MUA and CIM FINANCIAL
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MUA and CIM is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding MUA LTD and CIM FINANCIAL SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIM FINANCIAL SERVICES and MUA 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 MUA LTD are associated (or correlated) with CIM FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIM FINANCIAL SERVICES has no effect on the direction of MUA i.e., MUA and CIM FINANCIAL go up and down completely randomly.
Pair Corralation between MUA and CIM FINANCIAL
Assuming the 90 days trading horizon MUA LTD is expected to under-perform the CIM FINANCIAL. But the stock apears to be less risky and, when comparing its historical volatility, MUA LTD is 1.54 times less risky than CIM FINANCIAL. The stock trades about -0.08 of its potential returns per unit of risk. The CIM FINANCIAL SERVICES is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 936.00 in CIM FINANCIAL SERVICES on September 3, 2024 and sell it today you would earn a total of 264.00 from holding CIM FINANCIAL SERVICES or generate 28.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 87.3% |
| Values | Daily Returns |
MUA LTD vs. CIM FINANCIAL SERVICES
Performance |
| Timeline |
| MUA LTD |
| CIM FINANCIAL SERVICES |
MUA and CIM FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MUA and CIM FINANCIAL
The main advantage of trading using opposite MUA and CIM FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MUA position performs unexpectedly, CIM 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 CIM FINANCIAL will offset losses from the drop in CIM FINANCIAL's long position.| MUA vs. FINCORP INVESTMENT LTD | MUA vs. MCB GROUP LIMITED | MUA vs. LOTTOTECH LTD | MUA vs. LUX ISLAND RESORTS |
| CIM FINANCIAL vs. FINCORP INVESTMENT LTD | CIM FINANCIAL vs. MCB GROUP LIMITED | CIM FINANCIAL vs. MUA LTD | CIM FINANCIAL vs. LOTTOTECH LTD |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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