Correlation Between IT City and MFEC PCL
Can any of the company-specific risk be diversified away by investing in both IT City 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 IT City and MFEC PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IT City Public and MFEC PCL, you can compare the effects of market volatilities on IT City 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 IT City with a short position of MFEC PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of IT City and MFEC PCL.
Diversification Opportunities for IT City and MFEC PCL
Very poor diversification
The 3 months correlation between IT City and MFEC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding IT City Public and MFEC PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFEC PCL and IT City 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 IT City Public 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 IT City i.e., IT City and MFEC PCL go up and down completely randomly.
Pair Corralation between IT City and MFEC PCL
Assuming the 90 days horizon IT City Public is expected to generate 1.0 times more return on investment than MFEC PCL. However, IT City is 1.0 times more volatile than MFEC PCL. It trades about 0.04 of its potential returns per unit of risk. MFEC PCL is currently generating about 0.04 per unit of risk. If you would invest 459.00 in IT City Public on September 3, 2024 and sell it today you would earn a total of 3.00 from holding IT City Public or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IT City Public vs. MFEC PCL
Performance |
| Timeline |
| IT City Public |
| MFEC PCL |
IT City and MFEC PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IT City and MFEC PCL
The main advantage of trading using opposite IT City and MFEC PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IT City 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.| IT City vs. Internet Thailand Public | IT City vs. Jasmine International Public | IT City vs. Hana Microelectronics Public | IT City vs. Italian Thai Development Public |
| MFEC PCL vs. Internet Thailand Public | MFEC PCL vs. Advanced Information Technology | MFEC PCL vs. Metro Systems | MFEC PCL vs. Jasmine International Public |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |