Correlation Between Chin Huay and MFEC PCL
Can any of the company-specific risk be diversified away by investing in both Chin Huay 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 Chin Huay and MFEC PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chin Huay PCL and MFEC PCL, you can compare the effects of market volatilities on Chin Huay 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 Chin Huay with a short position of MFEC PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Huay and MFEC PCL.
Diversification Opportunities for Chin Huay and MFEC PCL
Very good diversification
The 3 months correlation between Chin and MFEC is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Chin Huay PCL and MFEC PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFEC PCL and Chin Huay 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 Chin Huay PCL 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 Chin Huay i.e., Chin Huay and MFEC PCL go up and down completely randomly.
Pair Corralation between Chin Huay and MFEC PCL
Assuming the 90 days horizon Chin Huay PCL is expected to under-perform the MFEC PCL. In addition to that, Chin Huay is 1.72 times more volatile than MFEC PCL. It trades about -0.31 of its total potential returns per unit of risk. MFEC PCL is currently generating about 0.11 per unit of volatility. If you would invest 615.00 in MFEC PCL on September 3, 2024 and sell it today you would earn a total of 15.00 from holding MFEC PCL or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chin Huay PCL vs. MFEC PCL
Performance |
| Timeline |
| Chin Huay PCL |
| MFEC PCL |
Chin Huay and MFEC PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chin Huay and MFEC PCL
The main advantage of trading using opposite Chin Huay and MFEC PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chin Huay 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.| Chin Huay vs. Chamni Eye PCL | Chin Huay vs. Bless Asset Group | Chin Huay vs. Bioscience Animal Health | Chin Huay vs. Royal Plus PCL |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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