Correlation Between MFC Asset and Stock Exchange
Can any of the company-specific risk be diversified away by investing in both MFC Asset and Stock Exchange 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 Stock Exchange 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 Stock Exchange Of, you can compare the effects of market volatilities on MFC Asset and Stock Exchange 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 Stock Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFC Asset and Stock Exchange.
Diversification Opportunities for MFC Asset and Stock Exchange
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFC and Stock is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding MFC Asset Management and Stock Exchange Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Exchange 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 Stock Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Exchange has no effect on the direction of MFC Asset i.e., MFC Asset and Stock Exchange go up and down completely randomly.
Pair Corralation between MFC Asset and Stock Exchange
Assuming the 90 days trading horizon MFC Asset Management is expected to generate 4.63 times more return on investment than Stock Exchange. However, MFC Asset is 4.63 times more volatile than Stock Exchange Of. It trades about 0.17 of its potential returns per unit of risk. Stock Exchange Of is currently generating about 0.14 per unit of risk. If you would invest 1,960 in MFC Asset Management on September 4, 2024 and sell it today you would earn a total of 790.00 from holding MFC Asset Management or generate 40.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFC Asset Management vs. Stock Exchange Of
Performance |
| Timeline |
MFC Asset and Stock Exchange Volatility Contrast
Predicted Return Density |
| Returns |
MFC Asset Management
Pair trading matchups for MFC Asset
Stock Exchange Of
Pair trading matchups for Stock Exchange
Pair Trading with MFC Asset and Stock Exchange
The main advantage of trading using opposite MFC Asset and Stock Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFC Asset position performs unexpectedly, Stock Exchange 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 Stock Exchange will offset losses from the drop in Stock Exchange's long position.| MFC Asset vs. Thai Steel Cable | MFC Asset vs. Tropical Canning Public | MFC Asset vs. RB Food Supply | MFC Asset vs. Eureka Design Public |
| Stock Exchange vs. MFC Asset Management | Stock Exchange vs. Mena Transport Public | Stock Exchange vs. Lohakit Metal Public | Stock Exchange vs. Porn Prom Metal |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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