Correlation Between MBANK and Computershare
Can any of the company-specific risk be diversified away by investing in both MBANK and Computershare 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 MBANK and Computershare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MBANK and Computershare Limited, you can compare the effects of market volatilities on MBANK and Computershare 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 MBANK with a short position of Computershare. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBANK and Computershare.
Diversification Opportunities for MBANK and Computershare
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between MBANK and Computershare is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding MBANK and Computershare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computershare Limited and MBANK 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 MBANK are associated (or correlated) with Computershare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computershare Limited has no effect on the direction of MBANK i.e., MBANK and Computershare go up and down completely randomly.
Pair Corralation between MBANK and Computershare
Assuming the 90 days trading horizon MBANK is expected to generate 1.05 times more return on investment than Computershare. However, MBANK is 1.05 times more volatile than Computershare Limited. It trades about 0.47 of its potential returns per unit of risk. Computershare Limited is currently generating about -0.02 per unit of risk. If you would invest 12,015 in MBANK on November 4, 2024 and sell it today you would earn a total of 2,315 from holding MBANK or generate 19.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MBANK vs. Computershare Limited
Performance |
| Timeline |
| MBANK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Computershare Limited |
MBANK and Computershare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBANK and Computershare
The main advantage of trading using opposite MBANK and Computershare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBANK position performs unexpectedly, Computershare 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 Computershare will offset losses from the drop in Computershare's long position.| MBANK vs. InPlay Oil Corp | MBANK vs. PLAYTIKA HOLDING DL 01 | MBANK vs. PLAYMATES TOYS | MBANK vs. Thai Beverage Public |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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