Correlation Between Clime Investment and MA Financial

Can any of the company-specific risk be diversified away by investing in both Clime Investment 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 Clime Investment and MA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clime Investment Management and MA Financial Group, you can compare the effects of market volatilities on Clime Investment 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 Clime Investment with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clime Investment and MA Financial.

Diversification Opportunities for Clime Investment and MA Financial

0.25

Correlation Coefficient

Clime Investment  MA Financial

Modest diversification

The 3 months correlation between Clime and MAF is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Clime Investment Management 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 Clime Investment 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 Clime Investment Management 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 Clime Investment i.e., Clime Investment and MA Financial go up and down completely randomly.

Pair Corralation between Clime Investment and MA Financial

Assuming the 90 days trading horizon Clime Investment Management is expected to generate 0.55 times more return on investment than MA Financial. However, Clime Investment Management is 1.83 times less risky than MA Financial. It trades about 0.24 of its potential returns per unit of risk. MA Financial Group is currently generating about -0.09 per unit of risk. If you would invest  34.00  in Clime Investment Management on October 8, 2024 and sell it today you would earn a total of  2.00  from holding Clime Investment Management or generate 5.88% return on investment over 90 days.

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

Clime Investment Management  vs.  MA Financial Group

Clime Investment Man

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Clime Investment Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Clime Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MA Financial Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MA Financial Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, MA Financial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Clime Investment and MA Financial

The main advantage of trading using opposite Clime Investment and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clime Investment 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 Clime Investment Management 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.