Correlation Between FINCORP INVESTMENT and MCB GROUP
Can any of the company-specific risk be diversified away by investing in both FINCORP INVESTMENT and MCB GROUP 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 FINCORP INVESTMENT and MCB GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FINCORP INVESTMENT LTD and MCB GROUP LIMITED, you can compare the effects of market volatilities on FINCORP INVESTMENT and MCB GROUP 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 FINCORP INVESTMENT with a short position of MCB GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of FINCORP INVESTMENT and MCB GROUP.
Diversification Opportunities for FINCORP INVESTMENT and MCB GROUP
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FINCORP and MCB is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding FINCORP INVESTMENT LTD and MCB GROUP LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCB GROUP LIMITED and FINCORP INVESTMENT 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 FINCORP INVESTMENT LTD are associated (or correlated) with MCB GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCB GROUP LIMITED has no effect on the direction of FINCORP INVESTMENT i.e., FINCORP INVESTMENT and MCB GROUP go up and down completely randomly.
Pair Corralation between FINCORP INVESTMENT and MCB GROUP
Assuming the 90 days trading horizon FINCORP INVESTMENT is expected to generate 1.79 times less return on investment than MCB GROUP. In addition to that, FINCORP INVESTMENT is 3.58 times more volatile than MCB GROUP LIMITED. It trades about 0.04 of its total potential returns per unit of risk. MCB GROUP LIMITED is currently generating about 0.26 per unit of volatility. If you would invest 44,600 in MCB GROUP LIMITED on November 30, 2024 and sell it today you would earn a total of 2,750 from holding MCB GROUP LIMITED or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FINCORP INVESTMENT LTD vs. MCB GROUP LIMITED
Performance |
| Timeline |
| FINCORP INVESTMENT LTD |
| MCB GROUP LIMITED |
FINCORP INVESTMENT and MCB GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FINCORP INVESTMENT and MCB GROUP
The main advantage of trading using opposite FINCORP INVESTMENT and MCB GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FINCORP INVESTMENT position performs unexpectedly, MCB GROUP 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 GROUP will offset losses from the drop in MCB GROUP's long position.| FINCORP INVESTMENT vs. AGAPE GLOBAL INVESTMENTS | FINCORP INVESTMENT vs. PHOENIX INVESTMENT PANY | FINCORP INVESTMENT vs. MAURITIUS CHEMICAL FERTILIZER | FINCORP INVESTMENT vs. NATIONAL INVESTMENT TRUST |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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