Correlation Between Maat Pharma and Cnova NV

Can any of the company-specific risk be diversified away by investing in both Maat Pharma and Cnova NV 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 Cnova NV 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 Cnova NV, you can compare the effects of market volatilities on Maat Pharma and Cnova NV 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 Cnova NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maat Pharma and Cnova NV.

Diversification Opportunities for Maat Pharma and Cnova NV

-0.24

Correlation Coefficient

Maat Pharma  Cnova NV

Very good diversification

The 3 months correlation between Maat and Cnova is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Maat Pharma SA and Cnova NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cnova NV 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 Cnova NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cnova NV has no effect on the direction of Maat Pharma i.e., Maat Pharma and Cnova NV go up and down completely randomly.

Pair Corralation between Maat Pharma and Cnova NV

Assuming the 90 days trading horizon Maat Pharma is expected to generate 3.0 times less return on investment than Cnova NV. But when comparing it to its historical volatility, Maat Pharma SA is 7.63 times less risky than Cnova NV. It trades about 0.09 of its potential returns per unit of risk. Cnova NV is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Cnova NV on October 25, 2024 and sell it today you would lose (24.00) from holding Cnova NV or give up 68.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Maat Pharma SA  vs.  Cnova NV

Maat Pharma SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maat Pharma SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maat Pharma sustained solid returns over the last few months and may actually be approaching a breakup point.

Cnova NV

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cnova NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cnova NV sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maat Pharma and Cnova NV

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

The idea behind Maat Pharma SA and Cnova NV 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.