Correlation Between Malteries Franco and Ferm Casino

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

By analyzing existing cross correlation between Malteries Franco Belges Socit and Ferm Casino Mun, you can compare the effects of market volatilities on Malteries Franco and Ferm Casino 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 Malteries Franco with a short position of Ferm Casino. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malteries Franco and Ferm Casino.

Diversification Opportunities for Malteries Franco and Ferm Casino

-0.24

Correlation Coefficient

Malteries Franco  Ferm Casino

Very good diversification

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

Pair Corralation between Malteries Franco and Ferm Casino

Assuming the 90 days trading horizon Malteries Franco Belges Socit is expected to generate 0.8 times more return on investment than Ferm Casino. However, Malteries Franco Belges Socit is 1.25 times less risky than Ferm Casino. It trades about 0.09 of its potential returns per unit of risk. Ferm Casino Mun is currently generating about -0.01 per unit of risk. If you would invest  77,656  in Malteries Franco Belges Socit on December 30, 2024 and sell it today you would earn a total of  8,344  from holding Malteries Franco Belges Socit or generate 10.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Malteries Franco Belges Socit  vs.  Ferm Casino Mun

Malteries Franco Belges

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Malteries Franco Belges Socit are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Malteries Franco may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ferm Casino Mun

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ferm Casino Mun has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ferm Casino is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Malteries Franco and Ferm Casino

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

The idea behind Malteries Franco Belges Socit and Ferm Casino Mun 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.