Correlation Between HEMARAJ INDUSTRIAL and MFC Industrial
Can any of the company-specific risk be diversified away by investing in both HEMARAJ INDUSTRIAL and MFC Industrial 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 HEMARAJ INDUSTRIAL and MFC Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEMARAJ INDUSTRIAL PROPERTY and MFC Industrial Investment, you can compare the effects of market volatilities on HEMARAJ INDUSTRIAL and MFC Industrial 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 HEMARAJ INDUSTRIAL with a short position of MFC Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMARAJ INDUSTRIAL and MFC Industrial.
Diversification Opportunities for HEMARAJ INDUSTRIAL and MFC Industrial
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between HEMARAJ and MFC is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding HEMARAJ INDUSTRIAL PROPERTY and MFC Industrial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFC Industrial Investment and HEMARAJ INDUSTRIAL 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 HEMARAJ INDUSTRIAL PROPERTY are associated (or correlated) with MFC Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFC Industrial Investment has no effect on the direction of HEMARAJ INDUSTRIAL i.e., HEMARAJ INDUSTRIAL and MFC Industrial go up and down completely randomly.
Pair Corralation between HEMARAJ INDUSTRIAL and MFC Industrial
Assuming the 90 days trading horizon HEMARAJ INDUSTRIAL PROPERTY is expected to generate 287.68 times more return on investment than MFC Industrial. However, HEMARAJ INDUSTRIAL is 287.68 times more volatile than MFC Industrial Investment. It trades about 0.28 of its potential returns per unit of risk. MFC Industrial Investment is currently generating about 0.29 per unit of risk. If you would invest 500.00 in HEMARAJ INDUSTRIAL PROPERTY on August 28, 2024 and sell it today you would earn a total of 5.00 from holding HEMARAJ INDUSTRIAL PROPERTY or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEMARAJ INDUSTRIAL PROPERTY vs. MFC Industrial Investment
Performance |
| Timeline |
| HEMARAJ INDUSTRIAL |
| MFC Industrial Investment |
HEMARAJ INDUSTRIAL and MFC Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEMARAJ INDUSTRIAL and MFC Industrial
The main advantage of trading using opposite HEMARAJ INDUSTRIAL and MFC Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEMARAJ INDUSTRIAL position performs unexpectedly, MFC Industrial 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 MFC Industrial will offset losses from the drop in MFC Industrial's long position.| HEMARAJ INDUSTRIAL vs. Prime Office Leasehold | HEMARAJ INDUSTRIAL vs. Golden Ventures Leasehold | HEMARAJ INDUSTRIAL vs. Impact Growth REIT |
| MFC Industrial vs. MFC Nichada Thani Property | MFC Industrial vs. LH Shopping Centers | MFC Industrial vs. MFC Strategic Storage | MFC Industrial vs. HEMARAJ INDUSTRIAL PROPERTY |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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