Correlation Between MFC Industrial and Food Moments
Can any of the company-specific risk be diversified away by investing in both MFC Industrial and Food Moments 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 MFC Industrial and Food Moments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFC Industrial Investment and Food Moments PCL, you can compare the effects of market volatilities on MFC Industrial and Food Moments 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 MFC Industrial with a short position of Food Moments. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFC Industrial and Food Moments.
Diversification Opportunities for MFC Industrial and Food Moments
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MFC and Food is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding MFC Industrial Investment and Food Moments PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Moments PCL and MFC 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 MFC Industrial Investment are associated (or correlated) with Food Moments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Moments PCL has no effect on the direction of MFC Industrial i.e., MFC Industrial and Food Moments go up and down completely randomly.
Pair Corralation between MFC Industrial and Food Moments
Assuming the 90 days trading horizon MFC Industrial Investment is expected to generate 0.51 times more return on investment than Food Moments. However, MFC Industrial Investment is 1.96 times less risky than Food Moments. It trades about 0.29 of its potential returns per unit of risk. Food Moments PCL is currently generating about -0.11 per unit of risk. If you would invest 619.00 in MFC Industrial Investment on August 29, 2024 and sell it today you would earn a total of 41.00 from holding MFC Industrial Investment or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFC Industrial Investment vs. Food Moments PCL
Performance |
| Timeline |
| MFC Industrial Investment |
| Food Moments PCL |
MFC Industrial and Food Moments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFC Industrial and Food Moments
The main advantage of trading using opposite MFC Industrial and Food Moments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFC Industrial position performs unexpectedly, Food Moments 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 Food Moments will offset losses from the drop in Food Moments' long position.| 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 |
| Food Moments vs. Delta Electronics Public | Food Moments vs. Delta Electronics Public | Food Moments vs. Airports of Thailand | Food Moments vs. Airports of Thailand |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |