Correlation Between MAROC LEASING and CFG BANK

Can any of the company-specific risk be diversified away by investing in both MAROC LEASING and CFG BANK 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 MAROC LEASING and CFG BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MAROC LEASING and CFG BANK, you can compare the effects of market volatilities on MAROC LEASING and CFG BANK 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 MAROC LEASING with a short position of CFG BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAROC LEASING and CFG BANK.

Diversification Opportunities for MAROC LEASING and CFG BANK

0.06

Correlation Coefficient

MAROC LEASING  CFG BANK

Significant diversification

The 3 months correlation between MAROC and CFG is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding MAROC LEASING and CFG BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFG BANK and MAROC LEASING 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 MAROC LEASING are associated (or correlated) with CFG BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CFG BANK has no effect on the direction of MAROC LEASING i.e., MAROC LEASING and CFG BANK go up and down completely randomly.

Pair Corralation between MAROC LEASING and CFG BANK

Assuming the 90 days trading horizon MAROC LEASING is expected to generate 2.56 times less return on investment than CFG BANK. But when comparing it to its historical volatility, MAROC LEASING is 1.12 times less risky than CFG BANK. It trades about 0.07 of its potential returns per unit of risk. CFG BANK is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  17,600  in CFG BANK on September 5, 2024 and sell it today you would earn a total of  3,100  from holding CFG BANK or generate 17.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

MAROC LEASING  vs.  CFG BANK

MAROC LEASING

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MAROC LEASING are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, MAROC LEASING may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CFG BANK

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CFG BANK are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental drivers, CFG BANK displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MAROC LEASING and CFG BANK

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

The idea behind MAROC LEASING and CFG BANK 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.