Correlation Between MCS Steel and Globlex Holding
Can any of the company-specific risk be diversified away by investing in both MCS Steel and Globlex 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 MCS Steel and Globlex Holding 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 Globlex Holding Management, you can compare the effects of market volatilities on MCS Steel and Globlex 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 MCS Steel with a short position of Globlex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCS Steel and Globlex Holding.
Diversification Opportunities for MCS Steel and Globlex Holding
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MCS and Globlex is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding MCS Steel Public and Globlex Holding Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globlex Holding Mana 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 Globlex Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globlex Holding Mana has no effect on the direction of MCS Steel i.e., MCS Steel and Globlex Holding go up and down completely randomly.
Pair Corralation between MCS Steel and Globlex Holding
Assuming the 90 days trading horizon MCS Steel Public is expected to under-perform the Globlex Holding. But the stock apears to be less risky and, when comparing its historical volatility, MCS Steel Public is 1.4 times less risky than Globlex Holding. The stock trades about -0.16 of its potential returns per unit of risk. The Globlex Holding Management is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 66.00 in Globlex Holding Management on October 22, 2024 and sell it today you would earn a total of 0.00 from holding Globlex Holding Management or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
MCS Steel Public vs. Globlex Holding Management
Performance |
| Timeline |
| MCS Steel Public |
| Globlex Holding Mana |
MCS Steel and Globlex Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCS Steel and Globlex Holding
The main advantage of trading using opposite MCS Steel and Globlex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCS Steel position performs unexpectedly, Globlex 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 Globlex Holding will offset losses from the drop in Globlex Holding's long position.| MCS Steel vs. Lalin Property Public | MCS Steel vs. Land and Houses | MCS Steel vs. Banpu Public | MCS Steel vs. TISCO Financial Group |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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