Correlation Between Pioneer Credit and MA Financial
Can any of the company-specific risk be diversified away by investing in both Pioneer Credit 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 Pioneer Credit and MA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pioneer Credit and MA Financial Group, you can compare the effects of market volatilities on Pioneer Credit 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 Pioneer Credit with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Credit and MA Financial.
Diversification Opportunities for Pioneer Credit and MA Financial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pioneer and MAF is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Credit 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 Pioneer Credit 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 Pioneer Credit 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 Pioneer Credit i.e., Pioneer Credit and MA Financial go up and down completely randomly.
Pair Corralation between Pioneer Credit and MA Financial
Assuming the 90 days trading horizon Pioneer Credit is expected to generate 1.64 times more return on investment than MA Financial. However, Pioneer Credit is 1.64 times more volatile than MA Financial Group. It trades about 0.06 of its potential returns per unit of risk. MA Financial Group is currently generating about 0.02 per unit of risk. If you would invest 61.00 in Pioneer Credit on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Pioneer Credit or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pioneer Credit vs. MA Financial Group
Performance |
| Timeline |
| Pioneer Credit |
| MA Financial Group |
Pioneer Credit and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pioneer Credit and MA Financial
The main advantage of trading using opposite Pioneer Credit and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Credit 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.| Pioneer Credit vs. Champion Iron | Pioneer Credit vs. Ridley | Pioneer Credit vs. Peel Mining | Pioneer Credit vs. Australian Dairy Farms |
| MA Financial vs. Champion Iron | MA Financial vs. Ridley | MA Financial vs. Peel Mining | MA Financial vs. Australian Dairy Farms |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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