Correlation Between MFC Industrial and Nova Organic
Can any of the company-specific risk be diversified away by investing in both MFC Industrial and Nova Organic 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 Nova Organic 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 Nova Organic PCL, you can compare the effects of market volatilities on MFC Industrial and Nova Organic 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 Nova Organic. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFC Industrial and Nova Organic.
Diversification Opportunities for MFC Industrial and Nova Organic
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFC and Nova is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding MFC Industrial Investment and Nova Organic PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Organic 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 Nova Organic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Organic PCL has no effect on the direction of MFC Industrial i.e., MFC Industrial and Nova Organic go up and down completely randomly.
Pair Corralation between MFC Industrial and Nova Organic
Assuming the 90 days trading horizon MFC Industrial Investment is expected to generate 0.54 times more return on investment than Nova Organic. However, MFC Industrial Investment is 1.86 times less risky than Nova Organic. It trades about 0.29 of its potential returns per unit of risk. Nova Organic PCL is currently generating about -0.43 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFC Industrial Investment vs. Nova Organic PCL
Performance |
| Timeline |
| MFC Industrial Investment |
| Nova Organic PCL |
MFC Industrial and Nova Organic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFC Industrial and Nova Organic
The main advantage of trading using opposite MFC Industrial and Nova Organic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFC Industrial position performs unexpectedly, Nova Organic 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 Nova Organic will offset losses from the drop in Nova Organic's 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 |
| Nova Organic vs. Chamni Eye PCL | Nova Organic vs. Siam Global House | Nova Organic vs. The Erawan Group | Nova Organic vs. Ditto 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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