Correlation Between Malaga Financial and Ft 7927

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Can any of the company-specific risk be diversified away by investing in both Malaga Financial and Ft 7927 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 Malaga Financial and Ft 7927 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malaga Financial and Ft 7927 Corporate, you can compare the effects of market volatilities on Malaga Financial and Ft 7927 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 Malaga Financial with a short position of Ft 7927. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malaga Financial and Ft 7927.

Diversification Opportunities for Malaga Financial and Ft 7927

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Malaga and FCOLDX is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Malaga Financial and Ft 7927 Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ft 7927 Corporate and Malaga Financial 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 Malaga Financial are associated (or correlated) with Ft 7927. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ft 7927 Corporate has no effect on the direction of Malaga Financial i.e., Malaga Financial and Ft 7927 go up and down completely randomly.

Pair Corralation between Malaga Financial and Ft 7927

Given the investment horizon of 90 days Malaga Financial is expected to generate 5.55 times less return on investment than Ft 7927. But when comparing it to its historical volatility, Malaga Financial is 3.83 times less risky than Ft 7927. It trades about 0.03 of its potential returns per unit of risk. Ft 7927 Corporate is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  24,185  in Ft 7927 Corporate on October 5, 2024 and sell it today you would lose (12,697) from holding Ft 7927 Corporate or give up 52.5% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy83.95%
ValuesDaily Returns

Malaga Financial  vs.  Ft 7927 Corporate

 Performance 
       Timeline  
Malaga Financial 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
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.
Ft 7927 Corporate 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ft 7927 Corporate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ft 7927 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Malaga Financial and Ft 7927 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Malaga Financial and Ft 7927

The main advantage of trading using opposite Malaga Financial and Ft 7927 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malaga Financial position performs unexpectedly, Ft 7927 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 Ft 7927 will offset losses from the drop in Ft 7927's long position.
The idea behind Malaga Financial and Ft 7927 Corporate 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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