Correlation Between MFC Asset and SAF Special
Can any of the company-specific risk be diversified away by investing in both MFC Asset and SAF Special 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 SAF Special 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 SAF Special Steel, you can compare the effects of market volatilities on MFC Asset and SAF Special 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 SAF Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFC Asset and SAF Special.
Diversification Opportunities for MFC Asset and SAF Special
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFC and SAF is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding MFC Asset Management and SAF Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Special Steel 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 SAF Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Special Steel has no effect on the direction of MFC Asset i.e., MFC Asset and SAF Special go up and down completely randomly.
Pair Corralation between MFC Asset and SAF Special
Assuming the 90 days trading horizon MFC Asset Management is expected to generate 12.91 times more return on investment than SAF Special. However, MFC Asset is 12.91 times more volatile than SAF Special Steel. It trades about 0.04 of its potential returns per unit of risk. SAF Special Steel is currently generating about -0.08 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 | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.46% |
| Values | Daily Returns |
MFC Asset Management vs. SAF Special Steel
Performance |
| Timeline |
| MFC Asset Management |
| SAF Special Steel |
MFC Asset and SAF Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFC Asset and SAF Special
The main advantage of trading using opposite MFC Asset and SAF Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFC Asset position performs unexpectedly, SAF Special 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 SAF Special will offset losses from the drop in SAF Special'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 |
| SAF Special vs. Ratchthani Leasing Public | SAF Special vs. LH Hotel Leasehold | SAF Special vs. BA Airport Leasehold | SAF Special vs. KTBST Mixed Leasehold |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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