Correlation Between MCAN Mortgage and Bridgemarq Real

Can any of the company-specific risk be diversified away by investing in both MCAN Mortgage and Bridgemarq Real 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 MCAN Mortgage and Bridgemarq Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MCAN Mortgage and Bridgemarq Real Estate, you can compare the effects of market volatilities on MCAN Mortgage and Bridgemarq Real 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 MCAN Mortgage with a short position of Bridgemarq Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCAN Mortgage and Bridgemarq Real.

Diversification Opportunities for MCAN Mortgage and Bridgemarq Real

0.9

Correlation Coefficient

MCAN Mortgage  Bridgemarq Real

Almost no diversification

The 3 months correlation between MCAN and Bridgemarq is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding MCAN Mortgage and Bridgemarq Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgemarq Real Estate and MCAN Mortgage 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 MCAN Mortgage are associated (or correlated) with Bridgemarq Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgemarq Real Estate has no effect on the direction of MCAN Mortgage i.e., MCAN Mortgage and Bridgemarq Real go up and down completely randomly.

Pair Corralation between MCAN Mortgage and Bridgemarq Real

Assuming the 90 days trading horizon MCAN Mortgage is expected to generate 1.0 times more return on investment than Bridgemarq Real. However, MCAN Mortgage is 1.0 times less risky than Bridgemarq Real. It trades about 0.17 of its potential returns per unit of risk. Bridgemarq Real Estate is currently generating about 0.16 per unit of risk. If you would invest  1,728  in MCAN Mortgage on September 4, 2024 and sell it today you would earn a total of  227.00  from holding MCAN Mortgage or generate 13.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

MCAN Mortgage  vs.  Bridgemarq Real Estate

MCAN Mortgage

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MCAN Mortgage are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, MCAN Mortgage displayed solid returns over the last few months and may actually be approaching a breakup point.

Bridgemarq Real Estate

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgemarq Real Estate are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Bridgemarq Real may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with MCAN Mortgage and Bridgemarq Real

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

The idea behind MCAN Mortgage and Bridgemarq Real Estate 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.