Correlation Between Financiere Marjos and Financiere Moncey

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

By analyzing existing cross correlation between Financiere Marjos SA and Financiere Moncey SA, you can compare the effects of market volatilities on Financiere Marjos and Financiere Moncey 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 Financiere Marjos with a short position of Financiere Moncey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financiere Marjos and Financiere Moncey.

Diversification Opportunities for Financiere Marjos and Financiere Moncey

0.62

Correlation Coefficient

Financiere Marjos  Financiere Moncey

Poor diversification

The 3 months correlation between Financiere and Financiere is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Financiere Marjos SA and Financiere Moncey SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financiere Moncey and Financiere Marjos 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 Financiere Marjos SA are associated (or correlated) with Financiere Moncey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financiere Moncey has no effect on the direction of Financiere Marjos i.e., Financiere Marjos and Financiere Moncey go up and down completely randomly.

Pair Corralation between Financiere Marjos and Financiere Moncey

Assuming the 90 days trading horizon Financiere Marjos SA is expected to generate 2.82 times more return on investment than Financiere Moncey. However, Financiere Marjos is 2.82 times more volatile than Financiere Moncey SA. It trades about 0.25 of its potential returns per unit of risk. Financiere Moncey SA is currently generating about 0.15 per unit of risk. If you would invest  6.45  in Financiere Marjos SA on October 4, 2024 and sell it today you would earn a total of  5.55  from holding Financiere Marjos SA or generate 86.05% return on investment over 90 days.

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

Financiere Marjos SA  vs.  Financiere Moncey SA

Financiere Marjos

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Financiere Marjos SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Financiere Marjos sustained solid returns over the last few months and may actually be approaching a breakup point.

Financiere Moncey

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Financiere Moncey SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Financiere Moncey reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Financiere Marjos and Financiere Moncey

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

The idea behind Financiere Marjos SA and Financiere Moncey SA 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.