Correlation Between Wt Financial and MA Financial

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Can any of the company-specific risk be diversified away by investing in both Wt Financial 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 Wt Financial and MA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wt Financial Group and MA Financial Group, you can compare the effects of market volatilities on Wt Financial 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 Wt Financial with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wt Financial and MA Financial.

Diversification Opportunities for Wt Financial and MA Financial

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between WTL and MAF is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Wt Financial Group 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 Wt 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 Wt Financial Group 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 Wt Financial i.e., Wt Financial and MA Financial go up and down completely randomly.

Pair Corralation between Wt Financial and MA Financial

Assuming the 90 days trading horizon Wt Financial Group is expected to under-perform the MA Financial. In addition to that, Wt Financial is 1.5 times more volatile than MA Financial Group. It trades about -0.05 of its total potential returns per unit of risk. MA Financial Group is currently generating about -0.01 per unit of volatility. If you would invest  646.00  in MA Financial Group on September 6, 2024 and sell it today you would lose (7.00) from holding MA Financial Group or give up 1.08% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

Wt Financial Group  vs.  MA Financial Group

 Performance 
       Timeline  
Wt Financial Group 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Wt Financial Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Wt Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.
MA Financial Group 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in MA Financial Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, MA Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Wt Financial and MA Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Wt Financial and MA Financial

The main advantage of trading using opposite Wt Financial and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wt Financial 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.
The idea behind Wt Financial Group and MA Financial Group 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.
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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