Correlation Between ITV PLC and MCF Energy
Can any of the company-specific risk be diversified away by investing in both ITV PLC and MCF Energy 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 ITV PLC and MCF Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITV PLC ADR and MCF Energy, you can compare the effects of market volatilities on ITV PLC and MCF Energy 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 ITV PLC with a short position of MCF Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITV PLC and MCF Energy.
Diversification Opportunities for ITV PLC and MCF Energy
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITV and MCF is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding ITV PLC ADR and MCF Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCF Energy and ITV PLC 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 ITV PLC ADR are associated (or correlated) with MCF Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCF Energy has no effect on the direction of ITV PLC i.e., ITV PLC and MCF Energy go up and down completely randomly.
Pair Corralation between ITV PLC and MCF Energy
Assuming the 90 days horizon ITV PLC ADR is expected to generate 0.36 times more return on investment than MCF Energy. However, ITV PLC ADR is 2.79 times less risky than MCF Energy. It trades about 0.04 of its potential returns per unit of risk. MCF Energy is currently generating about -0.07 per unit of risk. If you would invest 897.00 in ITV PLC ADR on November 5, 2024 and sell it today you would earn a total of 11.00 from holding ITV PLC ADR or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITV PLC ADR vs. MCF Energy
Performance |
| Timeline |
| ITV PLC ADR |
| MCF Energy |
ITV PLC and MCF Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITV PLC and MCF Energy
The main advantage of trading using opposite ITV PLC and MCF Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITV PLC position performs unexpectedly, MCF Energy 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 MCF Energy will offset losses from the drop in MCF Energy's long position.| ITV PLC vs. ProSiebenSat1 Media AG | ITV PLC vs. RTL Group SA | ITV PLC vs. iHeartMedia | ITV PLC vs. TV Azteca SAB |
| MCF Energy vs. Reservoir Media | MCF Energy vs. Ziff Davis | MCF Energy vs. Analog Devices | MCF Energy vs. KVH Industries |
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
| 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 | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |