Correlation Between Maat Pharma and Caisse Regionale

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

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

Diversification Opportunities for Maat Pharma and Caisse Regionale

0.64

Correlation Coefficient

Maat Pharma  Caisse Regionale

Poor diversification

The 3 months correlation between Maat and Caisse is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Maat Pharma SA and Caisse Regionale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caisse Regionale and Maat Pharma 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 Maat Pharma SA are associated (or correlated) with Caisse Regionale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caisse Regionale has no effect on the direction of Maat Pharma i.e., Maat Pharma and Caisse Regionale go up and down completely randomly.

Pair Corralation between Maat Pharma and Caisse Regionale

Assuming the 90 days trading horizon Maat Pharma is expected to generate 9.0 times less return on investment than Caisse Regionale. But when comparing it to its historical volatility, Maat Pharma SA is 1.11 times less risky than Caisse Regionale. It trades about 0.05 of its potential returns per unit of risk. Caisse Regionale de is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest  6,080  in Caisse Regionale de on October 1, 2024 and sell it today you would earn a total of  820.00  from holding Caisse Regionale de or generate 13.49% return on investment over 90 days.

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

Maat Pharma SA  vs.  Caisse Regionale de

Maat Pharma SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maat Pharma SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maat Pharma may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Caisse Regionale

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caisse Regionale de are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Caisse Regionale sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maat Pharma and Caisse Regionale

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

The idea behind Maat Pharma SA and Caisse Regionale de 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.