Correlation Between MCB GROUP and CONSTANCE HOTELS
Can any of the company-specific risk be diversified away by investing in both MCB GROUP and CONSTANCE HOTELS 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 MCB GROUP and CONSTANCE HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCB GROUP LIMITED and CONSTANCE HOTELS SERVICES, you can compare the effects of market volatilities on MCB GROUP and CONSTANCE HOTELS 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 MCB GROUP with a short position of CONSTANCE HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCB GROUP and CONSTANCE HOTELS.
Diversification Opportunities for MCB GROUP and CONSTANCE HOTELS
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between MCB and CONSTANCE is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding MCB GROUP LIMITED and CONSTANCE HOTELS SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSTANCE HOTELS SERVICES and MCB 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 MCB GROUP LIMITED are associated (or correlated) with CONSTANCE HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSTANCE HOTELS SERVICES has no effect on the direction of MCB GROUP i.e., MCB GROUP and CONSTANCE HOTELS go up and down completely randomly.
Pair Corralation between MCB GROUP and CONSTANCE HOTELS
Assuming the 90 days trading horizon MCB GROUP LIMITED is expected to generate 0.7 times more return on investment than CONSTANCE HOTELS. However, MCB GROUP LIMITED is 1.42 times less risky than CONSTANCE HOTELS. It trades about 0.1 of its potential returns per unit of risk. CONSTANCE HOTELS SERVICES is currently generating about 0.0 per unit of risk. If you would invest 31,200 in MCB GROUP LIMITED on September 3, 2024 and sell it today you would earn a total of 12,800 from holding MCB GROUP LIMITED or generate 41.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCB GROUP LIMITED vs. CONSTANCE HOTELS SERVICES
Performance |
| Timeline |
| MCB GROUP LIMITED |
| CONSTANCE HOTELS SERVICES |
MCB GROUP and CONSTANCE HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCB GROUP and CONSTANCE HOTELS
The main advantage of trading using opposite MCB GROUP and CONSTANCE HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCB GROUP position performs unexpectedly, CONSTANCE HOTELS 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 CONSTANCE HOTELS will offset losses from the drop in CONSTANCE HOTELS's long position.| MCB GROUP vs. CAVELL TOURISTIC INVESTMENTS | MCB GROUP vs. MAURITIUS CHEMICAL FERTILIZER | MCB GROUP vs. CIM FINANCIAL SERVICES | MCB GROUP vs. NEW MAURITIUS HOTELS |
| CONSTANCE HOTELS vs. FINCORP INVESTMENT LTD | CONSTANCE HOTELS vs. MCB GROUP LIMITED | CONSTANCE HOTELS vs. MUA LTD | CONSTANCE HOTELS vs. LOTTOTECH LTD |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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