Correlation Between CHAR Technologies and MCAN Mortgage

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

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

Diversification Opportunities for CHAR Technologies and MCAN Mortgage

-0.77

Correlation Coefficient

CHAR Technologies  MCAN Mortgage

Pay attention - limited upside

The 3 months correlation between CHAR and MCAN is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding CHAR Technologies and MCAN Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCAN Mortgage and CHAR 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 CHAR Technologies are associated (or correlated) with MCAN Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCAN Mortgage has no effect on the direction of CHAR Technologies i.e., CHAR Technologies and MCAN Mortgage go up and down completely randomly.

Pair Corralation between CHAR Technologies and MCAN Mortgage

Assuming the 90 days horizon CHAR Technologies is expected to under-perform the MCAN Mortgage. In addition to that, CHAR Technologies is 4.58 times more volatile than MCAN Mortgage. It trades about -0.07 of its total potential returns per unit of risk. MCAN Mortgage is currently generating about 0.18 per unit of volatility. If you would invest  1,717  in MCAN Mortgage on September 3, 2024 and sell it today you would earn a total of  252.00  from holding MCAN Mortgage or generate 14.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CHAR Technologies  vs.  MCAN Mortgage

CHAR Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHAR Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

MCAN Mortgage

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MCAN Mortgage are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, MCAN Mortgage displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHAR Technologies and MCAN Mortgage

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

The idea behind CHAR Technologies and MCAN Mortgage 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.