Correlation Between Maat Pharma and Aubay Socit

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

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

Diversification Opportunities for Maat Pharma and Aubay Socit

0.17

Correlation Coefficient

Maat Pharma  Aubay Socit

Average diversification

The 3 months correlation between Maat and Aubay is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Maat Pharma SA and Aubay Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aubay Socit Anonyme and Maat Pharma 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 Maat Pharma SA are associated (or correlated) with Aubay Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aubay Socit Anonyme has no effect on the direction of Maat Pharma i.e., Maat Pharma and Aubay Socit go up and down completely randomly.

Pair Corralation between Maat Pharma and Aubay Socit

Assuming the 90 days trading horizon Maat Pharma SA is expected to generate 1.73 times more return on investment than Aubay Socit. However, Maat Pharma is 1.73 times more volatile than Aubay Socit Anonyme. It trades about 0.06 of its potential returns per unit of risk. Aubay Socit Anonyme is currently generating about 0.06 per unit of risk. If you would invest  670.00  in Maat Pharma SA on October 13, 2024 and sell it today you would earn a total of  122.00  from holding Maat Pharma SA or generate 18.21% return on investment over 90 days.

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

Maat Pharma SA  vs.  Aubay Socit Anonyme

Maat Pharma SA

Risk-Adjusted Performance

4 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maat Pharma SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maat Pharma may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aubay Socit Anonyme

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aubay Socit Anonyme are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Aubay Socit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Maat Pharma and Aubay Socit

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

The idea behind Maat Pharma SA and Aubay Socit Anonyme 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.