Correlation Between MCOT Public and Autocorp Holding
Can any of the company-specific risk be diversified away by investing in both MCOT Public and Autocorp Holding 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 MCOT Public and Autocorp Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCOT Public and Autocorp Holding Public, you can compare the effects of market volatilities on MCOT Public and Autocorp Holding 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 MCOT Public with a short position of Autocorp Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCOT Public and Autocorp Holding.
Diversification Opportunities for MCOT Public and Autocorp Holding
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MCOT and Autocorp is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MCOT Public and Autocorp Holding Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autocorp Holding Public and MCOT Public 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 MCOT Public are associated (or correlated) with Autocorp Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autocorp Holding Public has no effect on the direction of MCOT Public i.e., MCOT Public and Autocorp Holding go up and down completely randomly.
Pair Corralation between MCOT Public and Autocorp Holding
Assuming the 90 days trading horizon MCOT Public is expected to generate 12.06 times less return on investment than Autocorp Holding. But when comparing it to its historical volatility, MCOT Public is 10.81 times less risky than Autocorp Holding. It trades about 0.09 of its potential returns per unit of risk. Autocorp Holding Public is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Autocorp Holding Public on November 2, 2024 and sell it today you would earn a total of 79.00 from holding Autocorp Holding Public or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.02% |
| Values | Daily Returns |
MCOT Public vs. Autocorp Holding Public
Performance |
| Timeline |
| MCOT Public |
| Autocorp Holding Public |
MCOT Public and Autocorp Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCOT Public and Autocorp Holding
The main advantage of trading using opposite MCOT Public and Autocorp Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCOT Public position performs unexpectedly, Autocorp Holding 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 Autocorp Holding will offset losses from the drop in Autocorp Holding's long position.| MCOT Public vs. Bangkok Chain Hospital | MCOT Public vs. Jay Mart Public | MCOT Public vs. Energy Absolute Public | MCOT Public vs. Delta Electronics Public |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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