Correlation Between MFC Asset and CIMB Thai
Can any of the company-specific risk be diversified away by investing in both MFC Asset and CIMB Thai 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 MFC Asset and CIMB Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFC Asset Management and CIMB Thai Bank, you can compare the effects of market volatilities on MFC Asset and CIMB Thai 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 MFC Asset with a short position of CIMB Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFC Asset and CIMB Thai.
Diversification Opportunities for MFC Asset and CIMB Thai
Pay attention - limited upside
The 3 months correlation between MFC and CIMB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MFC Asset Management and CIMB Thai Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMB Thai Bank and MFC Asset 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 MFC Asset Management are associated (or correlated) with CIMB Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMB Thai Bank has no effect on the direction of MFC Asset i.e., MFC Asset and CIMB Thai go up and down completely randomly.
Pair Corralation between MFC Asset and CIMB Thai
Assuming the 90 days trading horizon MFC Asset Management is expected to generate 1.0 times more return on investment than CIMB Thai. However, MFC Asset Management is 1.0 times less risky than CIMB Thai. It trades about 0.04 of its potential returns per unit of risk. CIMB Thai Bank is currently generating about 0.04 per unit of risk. If you would invest 2,012 in MFC Asset Management on September 14, 2024 and sell it today you would earn a total of 713.00 from holding MFC Asset Management or generate 35.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFC Asset Management vs. CIMB Thai Bank
Performance |
| Timeline |
| MFC Asset Management |
| CIMB Thai Bank |
MFC Asset and CIMB Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFC Asset and CIMB Thai
The main advantage of trading using opposite MFC Asset and CIMB Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFC Asset position performs unexpectedly, CIMB Thai 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 CIMB Thai will offset losses from the drop in CIMB Thai's long position.| MFC Asset vs. KGI Securities Public | MFC Asset vs. Lam Soon Public | MFC Asset vs. Lalin Property Public | MFC Asset vs. Hwa Fong Rubber |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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