Correlation Between Transport and MAS Financial

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

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

Diversification Opportunities for Transport and MAS Financial

0.76

Correlation Coefficient

Transport  MAS Financial

Poor diversification

The 3 months correlation between Transport and MAS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Transport of and MAS Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAS Financial Services and Transport 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 Transport of are associated (or correlated) with MAS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAS Financial Services has no effect on the direction of Transport i.e., Transport and MAS Financial go up and down completely randomly.

Pair Corralation between Transport and MAS Financial

Assuming the 90 days trading horizon Transport is expected to generate 1.57 times less return on investment than MAS Financial. But when comparing it to its historical volatility, Transport of is 1.17 times less risky than MAS Financial. It trades about 0.12 of its potential returns per unit of risk. MAS Financial Services is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  27,692  in MAS Financial Services on April 21, 2025 and sell it today you would earn a total of  6,223  from holding MAS Financial Services or generate 22.47% return on investment over 90 days.

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

Transport of  vs.  MAS Financial Services

Transport

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Transport of are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Transport exhibited solid returns over the last few months and may actually be approaching a breakup point.

MAS Financial Services

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MAS Financial Services are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, MAS Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Transport and MAS Financial

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

The idea behind Transport of and MAS Financial Services 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.