Correlation Between MCS Steel and SPCG Public
Can any of the company-specific risk be diversified away by investing in both MCS Steel and SPCG Public 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 SPCG Public 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 SPCG Public, you can compare the effects of market volatilities on MCS Steel and SPCG Public 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 SPCG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCS Steel and SPCG Public.
Diversification Opportunities for MCS Steel and SPCG Public
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MCS and SPCG is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MCS Steel Public and SPCG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPCG Public 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 SPCG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPCG Public has no effect on the direction of MCS Steel i.e., MCS Steel and SPCG Public go up and down completely randomly.
Pair Corralation between MCS Steel and SPCG Public
Assuming the 90 days trading horizon MCS Steel Public is expected to generate 56.64 times more return on investment than SPCG Public. However, MCS Steel is 56.64 times more volatile than SPCG Public. It trades about 0.08 of its potential returns per unit of risk. SPCG Public is currently generating about -0.02 per unit of risk. If you would invest 730.00 in MCS Steel Public on September 1, 2024 and sell it today you would lose (20.00) from holding MCS Steel Public or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
MCS Steel Public vs. SPCG Public
Performance |
| Timeline |
| MCS Steel Public |
| SPCG Public |
MCS Steel and SPCG Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCS Steel and SPCG Public
The main advantage of trading using opposite MCS Steel and SPCG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCS Steel position performs unexpectedly, SPCG Public 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 SPCG Public will offset losses from the drop in SPCG Public'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 |
| SPCG Public vs. BCPG Public | SPCG Public vs. TPI Polene Power | SPCG Public vs. BTS Group Holdings | SPCG Public vs. Energy Absolute 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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