Correlation Between TRON and MFA Financial
Can any of the company-specific risk be diversified away by investing in both TRON and MFA 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 TRON and MFA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRON and MFA Financial SR, you can compare the effects of market volatilities on TRON and MFA 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 TRON with a short position of MFA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRON and MFA Financial.
Diversification Opportunities for TRON and MFA Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TRON and MFA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TRON and MFA Financial SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFA Financial SR and TRON 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 TRON are associated (or correlated) with MFA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFA Financial SR has no effect on the direction of TRON i.e., TRON and MFA Financial go up and down completely randomly.
Pair Corralation between TRON and MFA Financial
If you would invest 15.00 in TRON on November 2, 2024 and sell it today you would earn a total of 10.00 from holding TRON or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
TRON vs. MFA Financial SR
Performance |
| Timeline |
| TRON |
| MFA Financial SR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TRON and MFA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRON and MFA Financial
The main advantage of trading using opposite TRON and MFA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON position performs unexpectedly, MFA 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 MFA Financial will offset losses from the drop in MFA Financial's long position.The idea behind TRON and MFA Financial SR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MFA Financial vs. TFI International | MFA Financial vs. Vestis | MFA Financial vs. MPLX LP | MFA Financial vs. Mesa Air Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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