Correlation Between Speed Rabbit and Maat Pharma

Can any of the company-specific risk be diversified away by investing in both Speed Rabbit and Maat Pharma 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 Speed Rabbit and Maat Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Speed Rabbit Pizza and Maat Pharma SA, you can compare the effects of market volatilities on Speed Rabbit and Maat Pharma 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 Speed Rabbit with a short position of Maat Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Speed Rabbit and Maat Pharma.

Diversification Opportunities for Speed Rabbit and Maat Pharma

0.61

Correlation Coefficient

Speed Rabbit  Maat Pharma

Poor diversification

The 3 months correlation between Speed and Maat is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Speed Rabbit Pizza and Maat Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maat Pharma SA and Speed Rabbit 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 Speed Rabbit Pizza are associated (or correlated) with Maat Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maat Pharma SA has no effect on the direction of Speed Rabbit i.e., Speed Rabbit and Maat Pharma go up and down completely randomly.

Pair Corralation between Speed Rabbit and Maat Pharma

Assuming the 90 days trading horizon Speed Rabbit Pizza is expected to generate 2.17 times more return on investment than Maat Pharma. However, Speed Rabbit is 2.17 times more volatile than Maat Pharma SA. It trades about 0.06 of its potential returns per unit of risk. Maat Pharma SA is currently generating about 0.02 per unit of risk. If you would invest  920.00  in Speed Rabbit Pizza on October 12, 2024 and sell it today you would earn a total of  1,540  from holding Speed Rabbit Pizza or generate 167.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.42%
Values	Daily Returns

Speed Rabbit Pizza  vs.  Maat Pharma SA

Speed Rabbit Pizza

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Speed Rabbit Pizza are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Speed Rabbit reported solid returns over the last few months and may actually be approaching a breakup point.

Maat Pharma SA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maat Pharma SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maat Pharma sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Speed Rabbit and Maat Pharma

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

The idea behind Speed Rabbit Pizza and Maat Pharma SA 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .