Correlation Between Maat Pharma and Financiere Moncey

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

Diversification Opportunities for Maat Pharma and Financiere Moncey

0.42

Correlation Coefficient

Maat Pharma  Financiere Moncey

Very weak diversification

The 3 months correlation between Maat and Financiere is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Maat Pharma 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 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 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 Maat Pharma i.e., Maat Pharma and Financiere Moncey go up and down completely randomly.

Pair Corralation between Maat Pharma and Financiere Moncey

Assuming the 90 days trading horizon Maat Pharma SA is expected to under-perform the Financiere Moncey. In addition to that, Maat Pharma is 1.24 times more volatile than Financiere Moncey SA. It trades about -0.01 of its total potential returns per unit of risk. Financiere Moncey SA is currently generating about 0.3 per unit of volatility. If you would invest  12,000  in Financiere Moncey SA on September 22, 2024 and sell it today you would earn a total of  1,002  from holding Financiere Moncey SA or generate 8.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Maat Pharma SA  vs.  Financiere Moncey SA

Maat Pharma SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maat Pharma SA are ranked lower than 5 (%) 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 January 2025.

Financiere Moncey

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Financiere Moncey SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Financiere Moncey may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Maat Pharma and Financiere Moncey

The main advantage of trading using opposite Maat Pharma and Financiere Moncey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maat Pharma 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 Maat Pharma 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.