Correlation Between CIM FINANCIAL and MAURITIUS CHEMICAL

Can any of the company-specific risk be diversified away by investing in both CIM FINANCIAL and MAURITIUS CHEMICAL 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 CIM FINANCIAL and MAURITIUS CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CIM FINANCIAL SERVICES and MAURITIUS CHEMICAL FERTILIZER, you can compare the effects of market volatilities on CIM FINANCIAL and MAURITIUS CHEMICAL 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 CIM FINANCIAL with a short position of MAURITIUS CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIM FINANCIAL and MAURITIUS CHEMICAL.

Diversification Opportunities for CIM FINANCIAL and MAURITIUS CHEMICAL

0.76

Correlation Coefficient

CIM FINANCIAL  MAURITIUS CHEMICAL

Poor diversification

The 3 months correlation between CIM and MAURITIUS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CIM FINANCIAL SERVICES and MAURITIUS CHEMICAL FERTILIZER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAURITIUS CHEMICAL and CIM 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 CIM FINANCIAL SERVICES are associated (or correlated) with MAURITIUS CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAURITIUS CHEMICAL has no effect on the direction of CIM FINANCIAL i.e., CIM FINANCIAL and MAURITIUS CHEMICAL go up and down completely randomly.

Pair Corralation between CIM FINANCIAL and MAURITIUS CHEMICAL

Assuming the 90 days trading horizon CIM FINANCIAL SERVICES is expected to generate 1.03 times more return on investment than MAURITIUS CHEMICAL. However, CIM FINANCIAL is 1.03 times more volatile than MAURITIUS CHEMICAL FERTILIZER. It trades about 0.15 of its potential returns per unit of risk. MAURITIUS CHEMICAL FERTILIZER is currently generating about 0.14 per unit of risk. If you would invest  1,400  in CIM FINANCIAL SERVICES on December 28, 2024 and sell it today you would earn a total of  200.00  from holding CIM FINANCIAL SERVICES or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CIM FINANCIAL SERVICES  vs.  MAURITIUS CHEMICAL FERTILIZER

CIM FINANCIAL SERVICES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CIM FINANCIAL SERVICES are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, CIM FINANCIAL displayed solid returns over the last few months and may actually be approaching a breakup point.

MAURITIUS CHEMICAL

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MAURITIUS CHEMICAL FERTILIZER are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, MAURITIUS CHEMICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CIM FINANCIAL and MAURITIUS CHEMICAL

The main advantage of trading using opposite CIM FINANCIAL and MAURITIUS CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIM FINANCIAL position performs unexpectedly, MAURITIUS CHEMICAL 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 MAURITIUS CHEMICAL will offset losses from the drop in MAURITIUS CHEMICAL's long position.

The idea behind CIM FINANCIAL SERVICES and MAURITIUS CHEMICAL FERTILIZER 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.