Correlation Between Precious Metals and Malaga Financial

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

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

Diversification Opportunities for Precious Metals and Malaga Financial

-0.27

Correlation Coefficient

Precious Metals  Malaga Financial

Very good diversification

The 3 months correlation between Precious and Malaga is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Precious Metals And and Malaga Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaga Financial and Precious Metals 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 Precious Metals And are associated (or correlated) with Malaga Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaga Financial has no effect on the direction of Precious Metals i.e., Precious Metals and Malaga Financial go up and down completely randomly.

Pair Corralation between Precious Metals and Malaga Financial

Assuming the 90 days horizon Precious Metals is expected to generate 4.28 times less return on investment than Malaga Financial. But when comparing it to its historical volatility, Precious Metals And is 3.43 times less risky than Malaga Financial. It trades about 0.02 of its potential returns per unit of risk. Malaga Financial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,348  in Malaga Financial on October 5, 2024 and sell it today you would lose (108.00) from holding Malaga Financial or give up 4.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.19%
Values	Daily Returns

Precious Metals And  vs.  Malaga Financial

Precious Metals And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Precious Metals And has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Malaga Financial

Risk-Adjusted Performance

3 of 100

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.

Pair Trading with Precious Metals and Malaga Financial

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

The idea behind Precious Metals And and Malaga Financial 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.