Correlation Between MC Group and Mitsib Leasing
Can any of the company-specific risk be diversified away by investing in both MC Group and Mitsib Leasing 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 MC Group and Mitsib Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MC Group Public and Mitsib Leasing Public, you can compare the effects of market volatilities on MC Group and Mitsib Leasing 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 MC Group with a short position of Mitsib Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of MC Group and Mitsib Leasing.
Diversification Opportunities for MC Group and Mitsib Leasing
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between MC Group and Mitsib is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding MC Group Public and Mitsib Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsib Leasing Public and MC Group 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 MC Group Public are associated (or correlated) with Mitsib Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsib Leasing Public has no effect on the direction of MC Group i.e., MC Group and Mitsib Leasing go up and down completely randomly.
Pair Corralation between MC Group and Mitsib Leasing
Assuming the 90 days horizon MC Group Public is expected to under-perform the Mitsib Leasing. In addition to that, MC Group is 1.3 times more volatile than Mitsib Leasing Public. It trades about -0.42 of its total potential returns per unit of risk. Mitsib Leasing Public is currently generating about -0.12 per unit of volatility. If you would invest 74.00 in Mitsib Leasing Public on August 30, 2024 and sell it today you would lose (2.00) from holding Mitsib Leasing Public or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MC Group Public vs. Mitsib Leasing Public
Performance |
| Timeline |
| MC Group Public |
| Mitsib Leasing Public |
MC Group and Mitsib Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MC Group and Mitsib Leasing
The main advantage of trading using opposite MC Group and Mitsib Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MC Group position performs unexpectedly, Mitsib Leasing 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 Mitsib Leasing will offset losses from the drop in Mitsib Leasing's long position.| MC Group vs. CP ALL Public | MC Group vs. Bangkok Dusit Medical | MC Group vs. Central Pattana Public | MC Group vs. Advanced Info Service |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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