Correlation Between Malaga Financial and 50249AAA1

Can any of the company-specific risk be diversified away by investing in both Malaga Financial and 50249AAA1 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 50249AAA1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Malaga Financial and LYB INTERNATIONAL FINANCE, you can compare the effects of market volatilities on Malaga Financial and 50249AAA1 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 50249AAA1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malaga Financial and 50249AAA1.

Diversification Opportunities for Malaga Financial and 50249AAA1

-0.48

Correlation Coefficient

Malaga Financial  50249AAA1

Very good diversification

The 3 months correlation between Malaga and 50249AAA1 is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Malaga Financial and LYB INTERNATIONAL FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTERNATIONAL FINANCE 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 50249AAA1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTERNATIONAL FINANCE has no effect on the direction of Malaga Financial i.e., Malaga Financial and 50249AAA1 go up and down completely randomly.

Pair Corralation between Malaga Financial and 50249AAA1

Given the investment horizon of 90 days Malaga Financial is expected to under-perform the 50249AAA1. In addition to that, Malaga Financial is 1.05 times more volatile than LYB INTERNATIONAL FINANCE. It trades about -0.14 of its total potential returns per unit of risk. LYB INTERNATIONAL FINANCE is currently generating about 0.08 per unit of volatility. If you would invest  7,507  in LYB INTERNATIONAL FINANCE on December 24, 2024 and sell it today you would earn a total of  304.00  from holding LYB INTERNATIONAL FINANCE or generate 4.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Malaga Financial  vs.  LYB INTERNATIONAL FINANCE

Malaga Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Malaga Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LYB INTERNATIONAL FINANCE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 50249AAA1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Malaga Financial and 50249AAA1

The main advantage of trading using opposite Malaga Financial and 50249AAA1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malaga Financial position performs unexpectedly, 50249AAA1 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 50249AAA1 will offset losses from the drop in 50249AAA1's long position.

The idea behind Malaga Financial and LYB INTERNATIONAL FINANCE 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.

Check out your portfolio center.

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.