Correlation Between Olympia Financial and MCAN Mortgage
Can any of the company-specific risk be diversified away by investing in both Olympia Financial and MCAN Mortgage 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 Olympia Financial and MCAN Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympia Financial Group and MCAN Mortgage, you can compare the effects of market volatilities on Olympia Financial and MCAN Mortgage 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 Olympia Financial with a short position of MCAN Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympia Financial and MCAN Mortgage.
Diversification Opportunities for Olympia Financial and MCAN Mortgage
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Olympia and MCAN is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Olympia Financial Group and MCAN Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCAN Mortgage and Olympia 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 Olympia Financial Group are associated (or correlated) with MCAN Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCAN Mortgage has no effect on the direction of Olympia Financial i.e., Olympia Financial and MCAN Mortgage go up and down completely randomly.
Pair Corralation between Olympia Financial and MCAN Mortgage
Assuming the 90 days trading horizon Olympia Financial is expected to generate 2.39 times less return on investment than MCAN Mortgage. But when comparing it to its historical volatility, Olympia Financial Group is 1.28 times less risky than MCAN Mortgage. It trades about 0.12 of its potential returns per unit of risk. MCAN Mortgage is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,810 in MCAN Mortgage on September 3, 2024 and sell it today you would earn a total of 159.00 from holding MCAN Mortgage or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympia Financial Group vs. MCAN Mortgage
Performance |
| Timeline |
| Olympia Financial |
| MCAN Mortgage |
Olympia Financial and MCAN Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympia Financial and MCAN Mortgage
The main advantage of trading using opposite Olympia Financial and MCAN Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympia Financial position performs unexpectedly, MCAN Mortgage 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 MCAN Mortgage will offset losses from the drop in MCAN Mortgage's long position.| Olympia Financial vs. Firm Capital Mortgage | Olympia Financial vs. Atrium Mortgage Investment | Olympia Financial vs. MCAN Mortgage | Olympia Financial vs. Chesswood Group Limited |
| MCAN Mortgage vs. Timbercreek Financial Corp | MCAN Mortgage vs. Atrium Mortgage Investment | MCAN Mortgage vs. Firm Capital Mortgage | MCAN Mortgage vs. First National Financial |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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