Correlation Between MCB GROUP and HOTELEST

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Can any of the company-specific risk be diversified away by investing in both MCB GROUP and HOTELEST 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 HOTELEST 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 HOTELEST LTD, you can compare the effects of market volatilities on MCB GROUP and HOTELEST 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 HOTELEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCB GROUP and HOTELEST.

Diversification Opportunities for MCB GROUP and HOTELEST

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between MCB and HOTELEST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MCB GROUP LIMITED and HOTELEST LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOTELEST LTD 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 HOTELEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOTELEST LTD has no effect on the direction of MCB GROUP i.e., MCB GROUP and HOTELEST go up and down completely randomly.

Pair Corralation between MCB GROUP and HOTELEST

If you would invest  1,675  in HOTELEST LTD on September 12, 2024 and sell it today you would earn a total of  0.00  from holding HOTELEST LTD or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

MCB GROUP LIMITED  vs.  HOTELEST LTD

 Performance 
       Timeline  
MCB GROUP LIMITED 

Risk-Adjusted Performance

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Weak
Compared to the overall equity markets, risk-adjusted returns on investments in MCB GROUP LIMITED are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, MCB GROUP is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
HOTELEST LTD 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days HOTELEST LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, HOTELEST is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

MCB GROUP and HOTELEST Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MCB GROUP and HOTELEST

The main advantage of trading using opposite MCB GROUP and HOTELEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCB GROUP position performs unexpectedly, HOTELEST 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 HOTELEST will offset losses from the drop in HOTELEST's long position.
The idea behind MCB GROUP LIMITED and HOTELEST LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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