Correlation Between DMCC SPECIALITY and MAS Financial

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

By analyzing existing cross correlation between DMCC SPECIALITY CHEMICALS and MAS Financial Services, you can compare the effects of market volatilities on DMCC SPECIALITY and MAS 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 DMCC SPECIALITY with a short position of MAS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMCC SPECIALITY and MAS Financial.

Diversification Opportunities for DMCC SPECIALITY and MAS Financial

0.23

Correlation Coefficient

DMCC SPECIALITY  MAS Financial

Modest diversification

The 3 months correlation between DMCC and MAS is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding DMCC SPECIALITY CHEMICALS and MAS Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAS Financial Services and DMCC SPECIALITY 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 DMCC SPECIALITY CHEMICALS are associated (or correlated) with MAS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAS Financial Services has no effect on the direction of DMCC SPECIALITY i.e., DMCC SPECIALITY and MAS Financial go up and down completely randomly.

Pair Corralation between DMCC SPECIALITY and MAS Financial

Assuming the 90 days trading horizon DMCC SPECIALITY CHEMICALS is expected to generate 2.23 times more return on investment than MAS Financial. However, DMCC SPECIALITY is 2.23 times more volatile than MAS Financial Services. It trades about 0.02 of its potential returns per unit of risk. MAS Financial Services is currently generating about -0.15 per unit of risk. If you would invest  29,620  in DMCC SPECIALITY CHEMICALS on November 29, 2024 and sell it today you would lose (210.00) from holding DMCC SPECIALITY CHEMICALS or give up 0.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

DMCC SPECIALITY CHEMICALS  vs.  MAS Financial Services

DMCC SPECIALITY CHEMICALS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DMCC SPECIALITY CHEMICALS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, DMCC SPECIALITY is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

MAS Financial Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days MAS Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with DMCC SPECIALITY and MAS Financial

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

The idea behind DMCC SPECIALITY CHEMICALS and MAS Financial Services 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.