Correlation Between Mill City and Malaga Financial

Can any of the company-specific risk be diversified away by investing in both Mill City and Malaga Financial 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 Mill City and Malaga Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mill City Ventures and Malaga Financial, you can compare the effects of market volatilities on Mill City and Malaga Financial 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 Mill City with a short position of Malaga Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mill City and Malaga Financial.

Diversification Opportunities for Mill City and Malaga Financial

-0.03

Correlation Coefficient

Mill City  Malaga Financial

Good diversification

The 3 months correlation between Mill and Malaga is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and Malaga Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaga Financial and Mill City 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 Mill City Ventures are associated (or correlated) with Malaga Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaga Financial has no effect on the direction of Mill City i.e., Mill City and Malaga Financial go up and down completely randomly.

Pair Corralation between Mill City and Malaga Financial

Given the investment horizon of 90 days Mill City Ventures is expected to generate 11.32 times more return on investment than Malaga Financial. However, Mill City is 11.32 times more volatile than Malaga Financial. It trades about 0.06 of its potential returns per unit of risk. Malaga Financial is currently generating about 0.03 per unit of risk. If you would invest  228.00  in Mill City Ventures on October 5, 2024 and sell it today you would lose (32.00) from holding Mill City Ventures or give up 14.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.12%
Values	Daily Returns

Mill City Ventures  vs.  Malaga Financial

Mill City Ventures

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mill City Ventures are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mill City is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Malaga Financial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Malaga Financial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Malaga Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mill City and Malaga Financial

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

The idea behind Mill City Ventures and Malaga Financial 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.