Correlation Between MCOT Public and Matching Maximize
Can any of the company-specific risk be diversified away by investing in both MCOT Public and Matching Maximize 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 Matching Maximize into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCOT Public and Matching Maximize Solution, you can compare the effects of market volatilities on MCOT Public and Matching Maximize 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 Matching Maximize. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCOT Public and Matching Maximize.
Diversification Opportunities for MCOT Public and Matching Maximize
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MCOT and Matching is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding MCOT Public and Matching Maximize Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matching Maximize 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 Matching Maximize. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matching Maximize has no effect on the direction of MCOT Public i.e., MCOT Public and Matching Maximize go up and down completely randomly.
Pair Corralation between MCOT Public and Matching Maximize
Assuming the 90 days trading horizon MCOT Public is expected to generate 1.79 times more return on investment than Matching Maximize. However, MCOT Public is 1.79 times more volatile than Matching Maximize Solution. It trades about -0.06 of its potential returns per unit of risk. Matching Maximize Solution is currently generating about -0.15 per unit of risk. If you would invest 745.00 in MCOT Public on September 3, 2024 and sell it today you would lose (115.00) from holding MCOT Public or give up 15.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCOT Public vs. Matching Maximize Solution
Performance |
| Timeline |
| MCOT Public |
| Matching Maximize |
MCOT Public and Matching Maximize Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCOT Public and Matching Maximize
The main advantage of trading using opposite MCOT Public and Matching Maximize positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCOT Public position performs unexpectedly, Matching Maximize 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 Matching Maximize will offset losses from the drop in Matching Maximize's long position.| MCOT Public vs. BEC World Public | MCOT Public vs. Major Cineplex Group | MCOT Public vs. Italian Thai Development Public | MCOT Public vs. Dynasty Ceramic Public |
| Matching Maximize vs. MCOT Public | Matching Maximize vs. Major Cineplex Group | Matching Maximize vs. Matichon Public |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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