Correlation Between MCB GROUP and Dow Jones
Can any of the company-specific risk be diversified away by investing in both MCB GROUP and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on MCB GROUP and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCB GROUP and Dow Jones.
Diversification Opportunities for MCB GROUP and Dow Jones
Very weak diversification
The 3 months correlation between MCB and Dow is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding MCB GROUP LIMITED and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of MCB GROUP i.e., MCB GROUP and Dow Jones go up and down completely randomly.
Pair Corralation between MCB GROUP and Dow Jones
Assuming the 90 days trading horizon MCB GROUP LIMITED is expected to under-perform the Dow Jones. In addition to that, MCB GROUP is 1.22 times more volatile than Dow Jones Industrial. It trades about -0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.38 per unit of volatility. If you would invest 4,179,460 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 311,605 from holding Dow Jones Industrial or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
MCB GROUP LIMITED vs. Dow Jones Industrial
Performance |
| Timeline |
MCB GROUP and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
MCB GROUP LIMITED
Pair trading matchups for MCB GROUP
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with MCB GROUP and Dow Jones
The main advantage of trading using opposite MCB GROUP and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCB GROUP position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |