Correlation Between Boss Energy and MFF Capital
Can any of the company-specific risk be diversified away by investing in both Boss Energy and MFF Capital 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 Boss Energy and MFF Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boss Energy Limited and MFF Capital Investments, you can compare the effects of market volatilities on Boss Energy and MFF Capital 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 Boss Energy with a short position of MFF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boss Energy and MFF Capital.
Diversification Opportunities for Boss Energy and MFF Capital
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boss and MFF is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Boss Energy Limited and MFF Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFF Capital Investments and Boss Energy 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 Boss Energy Limited are associated (or correlated) with MFF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFF Capital Investments has no effect on the direction of Boss Energy i.e., Boss Energy and MFF Capital go up and down completely randomly.
Pair Corralation between Boss Energy and MFF Capital
Assuming the 90 days trading horizon Boss Energy Limited is expected to under-perform the MFF Capital. In addition to that, Boss Energy is 1.83 times more volatile than MFF Capital Investments. It trades about -0.34 of its total potential returns per unit of risk. MFF Capital Investments is currently generating about 0.32 per unit of volatility. If you would invest 427.00 in MFF Capital Investments on September 14, 2024 and sell it today you would earn a total of 42.00 from holding MFF Capital Investments or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boss Energy Limited vs. MFF Capital Investments
Performance |
| Timeline |
| Boss Energy Limited |
| MFF Capital Investments |
Boss Energy and MFF Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boss Energy and MFF Capital
The main advantage of trading using opposite Boss Energy and MFF Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boss Energy position performs unexpectedly, MFF Capital 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 MFF Capital will offset losses from the drop in MFF Capital's long position.| Boss Energy vs. Cleanaway Waste Management | Boss Energy vs. Auctus Alternative Investments | Boss Energy vs. Regal Funds Management | Boss Energy vs. Alternative Investment Trust |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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