Correlation Between Thorney Technologies and MA Financial

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

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

Diversification Opportunities for Thorney Technologies and MA Financial

0.32

Correlation Coefficient

Thorney Technologies  MA Financial

Weak diversification

The 3 months correlation between Thorney and MAF is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Thorney Technologies and MA Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MA Financial Group and Thorney Technologies 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 Thorney Technologies are associated (or correlated) with MA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MA Financial Group has no effect on the direction of Thorney Technologies i.e., Thorney Technologies and MA Financial go up and down completely randomly.

Pair Corralation between Thorney Technologies and MA Financial

Assuming the 90 days trading horizon Thorney Technologies is expected to under-perform the MA Financial. In addition to that, Thorney Technologies is 1.31 times more volatile than MA Financial Group. It trades about -0.12 of its total potential returns per unit of risk. MA Financial Group is currently generating about -0.06 per unit of volatility. If you would invest  632.00  in MA Financial Group on October 4, 2024 and sell it today you would lose (20.00) from holding MA Financial Group or give up 3.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Thorney Technologies  vs.  MA Financial Group

Thorney Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thorney Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Thorney Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

MA Financial Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MA Financial Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, MA Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Thorney Technologies and MA Financial

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

The idea behind Thorney Technologies and MA Financial Group 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.