Correlation Between 2S Metal and MFC Industrial
Can any of the company-specific risk be diversified away by investing in both 2S Metal and MFC Industrial 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 2S Metal and MFC Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2S Metal Public and MFC Industrial Investment, you can compare the effects of market volatilities on 2S Metal and MFC Industrial 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 2S Metal with a short position of MFC Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and MFC Industrial.
Diversification Opportunities for 2S Metal and MFC Industrial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 2S Metal and MFC is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and MFC Industrial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFC Industrial Investment and 2S Metal 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 2S Metal Public are associated (or correlated) with MFC Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFC Industrial Investment has no effect on the direction of 2S Metal i.e., 2S Metal and MFC Industrial go up and down completely randomly.
Pair Corralation between 2S Metal and MFC Industrial
Assuming the 90 days horizon 2S Metal Public is expected to under-perform the MFC Industrial. In addition to that, 2S Metal is 1.52 times more volatile than MFC Industrial Investment. It trades about -0.17 of its total potential returns per unit of risk. MFC Industrial Investment is currently generating about 0.39 per unit of volatility. If you would invest 619.00 in MFC Industrial Investment on August 27, 2024 and sell it today you would earn a total of 51.00 from holding MFC Industrial Investment or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
2S Metal Public vs. MFC Industrial Investment
Performance |
| Timeline |
| 2S Metal Public |
| MFC Industrial Investment |
2S Metal and MFC Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2S Metal and MFC Industrial
The main advantage of trading using opposite 2S Metal and MFC Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, MFC Industrial 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 MFC Industrial will offset losses from the drop in MFC Industrial's long position.| 2S Metal vs. Tata Steel Public | 2S Metal vs. G J Steel | 2S Metal vs. TMT Steel Public | 2S Metal vs. MCS Steel Public |
| MFC Industrial vs. MFC Nichada Thani Property | MFC Industrial vs. LH Shopping Centers | MFC Industrial vs. MFC Strategic Storage | MFC Industrial vs. HEMARAJ INDUSTRIAL PROPERTY |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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