Correlation Between MCS Steel and Country Group
Can any of the company-specific risk be diversified away by investing in both MCS Steel and Country Group 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 MCS Steel and Country Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCS Steel Public and Country Group Holdings, you can compare the effects of market volatilities on MCS Steel and Country Group 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 MCS Steel with a short position of Country Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCS Steel and Country Group.
Diversification Opportunities for MCS Steel and Country Group
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MCS and Country is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding MCS Steel Public and Country Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Group Holdings and MCS Steel 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 MCS Steel Public are associated (or correlated) with Country Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Group Holdings has no effect on the direction of MCS Steel i.e., MCS Steel and Country Group go up and down completely randomly.
Pair Corralation between MCS Steel and Country Group
Assuming the 90 days trading horizon MCS Steel Public is expected to under-perform the Country Group. In addition to that, MCS Steel is 1.24 times more volatile than Country Group Holdings. It trades about -0.12 of its total potential returns per unit of risk. Country Group Holdings is currently generating about 0.01 per unit of volatility. If you would invest 68.00 in Country Group Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Country Group Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCS Steel Public vs. Country Group Holdings
Performance |
| Timeline |
| MCS Steel Public |
| Country Group Holdings |
MCS Steel and Country Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCS Steel and Country Group
The main advantage of trading using opposite MCS Steel and Country Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCS Steel position performs unexpectedly, Country Group 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 Country Group will offset losses from the drop in Country Group's long position.| MCS Steel vs. AAPICO Hitech Public | MCS Steel vs. AP Public | MCS Steel vs. Aikchol Hospital Public | MCS Steel vs. Bank of Ayudhya |
| Country Group vs. Asia Plus Group | Country Group vs. Globlex Holding Management | Country Group vs. Asia Green Energy | Country Group vs. Amanah Leasing 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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