Correlation Between AP Public and MFEC PCL
Can any of the company-specific risk be diversified away by investing in both AP Public and MFEC PCL 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 AP Public and MFEC PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Public and MFEC PCL, you can compare the effects of market volatilities on AP Public and MFEC PCL 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 AP Public with a short position of MFEC PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Public and MFEC PCL.
Diversification Opportunities for AP Public and MFEC PCL
Modest diversification
The 3 months correlation between AP Public and MFEC is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding AP Public and MFEC PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFEC PCL and AP Public 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 AP Public are associated (or correlated) with MFEC PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFEC PCL has no effect on the direction of AP Public i.e., AP Public and MFEC PCL go up and down completely randomly.
Pair Corralation between AP Public and MFEC PCL
Assuming the 90 days horizon AP Public is expected to under-perform the MFEC PCL. In addition to that, AP Public is 1.43 times more volatile than MFEC PCL. It trades about -0.27 of its total potential returns per unit of risk. MFEC PCL is currently generating about 0.01 per unit of volatility. If you would invest 630.00 in MFEC PCL on September 1, 2024 and sell it today you would earn a total of 0.00 from holding MFEC PCL or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AP Public vs. MFEC PCL
Performance |
| Timeline |
| AP Public |
| MFEC PCL |
AP Public and MFEC PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Public and MFEC PCL
The main advantage of trading using opposite AP Public and MFEC PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Public position performs unexpectedly, MFEC PCL 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 MFEC PCL will offset losses from the drop in MFEC PCL's long position.The idea behind AP Public and MFEC PCL 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.| MFEC PCL vs. AP Public | MFEC PCL vs. Jasmine International Public | MFEC PCL vs. Asia Plus Group | MFEC PCL vs. Bangchak Public |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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