Correlation Between Maanshan Iron and MF International
Can any of the company-specific risk be diversified away by investing in both Maanshan Iron and MF International 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 Maanshan Iron and MF International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maanshan Iron Steel and mF International Limited, you can compare the effects of market volatilities on Maanshan Iron and MF International 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 Maanshan Iron with a short position of MF International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and MF International.
Diversification Opportunities for Maanshan Iron and MF International
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Maanshan and MFI is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel and mF International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mF International and Maanshan Iron 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 Maanshan Iron Steel are associated (or correlated) with MF International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mF International has no effect on the direction of Maanshan Iron i.e., Maanshan Iron and MF International go up and down completely randomly.
Pair Corralation between Maanshan Iron and MF International
Assuming the 90 days horizon Maanshan Iron Steel is expected to generate 0.36 times more return on investment than MF International. However, Maanshan Iron Steel is 2.76 times less risky than MF International. It trades about 0.0 of its potential returns per unit of risk. mF International Limited is currently generating about -0.1 per unit of risk. If you would invest 20.00 in Maanshan Iron Steel on August 26, 2024 and sell it today you would lose (5.00) from holding Maanshan Iron Steel or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 30.58% |
| Values | Daily Returns |
Maanshan Iron Steel vs. mF International Limited
Performance |
| Timeline |
| Maanshan Iron Steel |
| mF International |
Maanshan Iron and MF International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maanshan Iron and MF International
The main advantage of trading using opposite Maanshan Iron and MF International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron position performs unexpectedly, MF International 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 MF International will offset losses from the drop in MF International's long position.| Maanshan Iron vs. Olympic Steel | Maanshan Iron vs. Mesabi Trust | Maanshan Iron vs. Universal Stainless Alloy | Maanshan Iron vs. POSCO Holdings |
| MF International vs. Olympic Steel | MF International vs. Maanshan Iron Steel | MF International vs. Insteel Industries | MF International vs. Tianjin Capital Environmental |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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