Correlation Between Mader Group and PFMT Old

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

By analyzing existing cross correlation between Mader Group Limited and PFMT Old, you can compare the effects of market volatilities on Mader Group and PFMT Old 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 Mader Group with a short position of PFMT Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mader Group and PFMT Old.

Diversification Opportunities for Mader Group and PFMT Old

0.0

Correlation Coefficient

Mader Group  PFMT Old

Pay attention - limited upside

The 3 months correlation between Mader and PFMT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mader Group Limited and PFMT Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFMT Old and Mader Group 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 Mader Group Limited are associated (or correlated) with PFMT Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFMT Old has no effect on the direction of Mader Group i.e., Mader Group and PFMT Old go up and down completely randomly.

Pair Corralation between Mader Group and PFMT Old

If you would invest  355.00  in Mader Group Limited on December 30, 2024 and sell it today you would earn a total of  45.00  from holding Mader Group Limited or generate 12.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mader Group Limited  vs.  PFMT Old

Mader Group Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mader Group Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Mader Group reported solid returns over the last few months and may actually be approaching a breakup point.

PFMT Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days PFMT Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, PFMT Old is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mader Group and PFMT Old

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

The idea behind Mader Group Limited and PFMT Old 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.