Correlation Between US Financial and M Split
Can any of the company-specific risk be diversified away by investing in both US Financial and M Split 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 US Financial and M Split into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Financial 15 and M Split Corp, you can compare the effects of market volatilities on US Financial and M Split 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 US Financial with a short position of M Split. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Financial and M Split.
Diversification Opportunities for US Financial and M Split
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FTU and XMF-A is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding US Financial 15 and M Split Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Split Corp and US Financial 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 US Financial 15 are associated (or correlated) with M Split. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Split Corp has no effect on the direction of US Financial i.e., US Financial and M Split go up and down completely randomly.
Pair Corralation between US Financial and M Split
Assuming the 90 days trading horizon US Financial is expected to generate 3.66 times less return on investment than M Split. But when comparing it to its historical volatility, US Financial 15 is 1.42 times less risky than M Split. It trades about 0.05 of its potential returns per unit of risk. M Split Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 50.00 in M Split Corp on August 27, 2025 and sell it today you would earn a total of 30.00 from holding M Split Corp or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Financial 15 vs. M Split Corp
Performance |
| Timeline |
| US Financial 15 |
| M Split Corp |
US Financial and M Split Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Financial and M Split
The main advantage of trading using opposite US Financial and M Split positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Financial position performs unexpectedly, M Split 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 M Split will offset losses from the drop in M Split's long position.| US Financial vs. JPMorgan Chase Co | US Financial vs. Bank of America | US Financial vs. BNP Paribas CDR | US Financial vs. CITIGROUP CDR |
| M Split vs. Canaf Investments | M Split vs. Economic Investment Trust | M Split vs. Upstart Investments | M Split vs. Partners Value Investments |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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