Correlation Between East West and MCB Bank
Can any of the company-specific risk be diversified away by investing in both East West and MCB Bank 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 East West and MCB Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Insurance and MCB Bank, you can compare the effects of market volatilities on East West and MCB Bank 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 East West with a short position of MCB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and MCB Bank.
Diversification Opportunities for East West and MCB Bank
Very good diversification
The 3 months correlation between East and MCB is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding East West Insurance and MCB Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCB Bank and East West 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 East West Insurance are associated (or correlated) with MCB Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCB Bank has no effect on the direction of East West i.e., East West and MCB Bank go up and down completely randomly.
Pair Corralation between East West and MCB Bank
If you would invest 5,729 in East West Insurance on November 8, 2024 and sell it today you would earn a total of 0.00 from holding East West Insurance or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 27.27% |
| Values | Daily Returns |
East West Insurance vs. MCB Bank
Performance |
| Timeline |
| East West Insurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| MCB Bank |
East West and MCB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and MCB Bank
The main advantage of trading using opposite East West and MCB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, MCB Bank 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 MCB Bank will offset losses from the drop in MCB Bank's long position.| East West vs. JS Bank | East West vs. National Bank of | East West vs. IGI Life Insurance | East West vs. Soneri Bank |
| MCB Bank vs. JS Investments | MCB Bank vs. MCB Investment Manag | MCB Bank vs. Pakistan Reinsurance | MCB Bank vs. Silkbank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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