Correlation Between MAROC LEASING and M2M GROUP

Can any of the company-specific risk be diversified away by investing in both MAROC LEASING and M2M GROUP 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 M2M GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MAROC LEASING and M2M GROUP, you can compare the effects of market volatilities on MAROC LEASING and M2M GROUP 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 M2M GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAROC LEASING and M2M GROUP.

Diversification Opportunities for MAROC LEASING and M2M GROUP

-0.02

Correlation Coefficient

MAROC LEASING  M2M GROUP

Good diversification

The 3 months correlation between MAROC and M2M is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding MAROC LEASING and M2M GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M2M GROUP 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 M2M GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M2M GROUP has no effect on the direction of MAROC LEASING i.e., MAROC LEASING and M2M GROUP go up and down completely randomly.

Pair Corralation between MAROC LEASING and M2M GROUP

Assuming the 90 days trading horizon MAROC LEASING is expected to generate 2.15 times less return on investment than M2M GROUP. But when comparing it to its historical volatility, MAROC LEASING is 2.05 times less risky than M2M GROUP. It trades about 0.05 of its potential returns per unit of risk. M2M GROUP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  55,000  in M2M GROUP on September 12, 2024 and sell it today you would earn a total of  3,200  from holding M2M GROUP or generate 5.82% return on investment over 90 days.

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

MAROC LEASING  vs.  M2M GROUP

MAROC LEASING

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MAROC LEASING are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, MAROC LEASING is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

M2M GROUP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in M2M GROUP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, M2M GROUP may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with MAROC LEASING and M2M GROUP

The main advantage of trading using opposite MAROC LEASING and M2M GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAROC LEASING position performs unexpectedly, M2M GROUP 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 M2M GROUP will offset losses from the drop in M2M GROUP's long position.

The idea behind MAROC LEASING and M2M GROUP 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.