Correlation Between MCAN Mortgage and Wajax

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

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

Diversification Opportunities for MCAN Mortgage and Wajax

-0.57

Correlation Coefficient

MCAN Mortgage  Wajax

Excellent diversification

The 3 months correlation between MCAN and Wajax is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding MCAN Mortgage and Wajax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wajax and MCAN Mortgage 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 MCAN Mortgage are associated (or correlated) with Wajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wajax has no effect on the direction of MCAN Mortgage i.e., MCAN Mortgage and Wajax go up and down completely randomly.

Pair Corralation between MCAN Mortgage and Wajax

Assuming the 90 days trading horizon MCAN Mortgage is expected to generate 0.45 times more return on investment than Wajax. However, MCAN Mortgage is 2.22 times less risky than Wajax. It trades about 0.12 of its potential returns per unit of risk. Wajax is currently generating about -0.03 per unit of risk. If you would invest  1,720  in MCAN Mortgage on September 15, 2024 and sell it today you would earn a total of  159.00  from holding MCAN Mortgage or generate 9.24% return on investment over 90 days.

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

MCAN Mortgage  vs.  Wajax

MCAN Mortgage

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MCAN Mortgage are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, MCAN Mortgage may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wajax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wajax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Wajax is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with MCAN Mortgage and Wajax

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

The idea behind MCAN Mortgage and Wajax 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.