Correlation Between MFEC PCL and IT City
Can any of the company-specific risk be diversified away by investing in both MFEC PCL and IT City 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 MFEC PCL and IT City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFEC PCL and IT City Public, you can compare the effects of market volatilities on MFEC PCL and IT City 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 MFEC PCL with a short position of IT City. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFEC PCL and IT City.
Diversification Opportunities for MFEC PCL and IT City
Very poor diversification
The 3 months correlation between MFEC and IT City is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding MFEC PCL and IT City Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IT City Public and MFEC PCL 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 MFEC PCL are associated (or correlated) with IT City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IT City Public has no effect on the direction of MFEC PCL i.e., MFEC PCL and IT City go up and down completely randomly.
Pair Corralation between MFEC PCL and IT City
Assuming the 90 days trading horizon MFEC PCL is expected to generate 1.03 times less return on investment than IT City. But when comparing it to its historical volatility, MFEC PCL is 1.0 times less risky than IT City. It trades about 0.04 of its potential returns per unit of risk. IT City Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 459.00 in IT City Public on September 3, 2024 and sell it today you would earn a total of 3.00 from holding IT City Public or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFEC PCL vs. IT City Public
Performance |
| Timeline |
| MFEC PCL |
| IT City Public |
MFEC PCL and IT City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFEC PCL and IT City
The main advantage of trading using opposite MFEC PCL and IT City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFEC PCL position performs unexpectedly, IT City 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 IT City will offset losses from the drop in IT City's long position.| MFEC PCL vs. Internet Thailand Public | MFEC PCL vs. Advanced Information Technology | MFEC PCL vs. Metro Systems | MFEC PCL vs. Jasmine International Public |
| IT City vs. Internet Thailand Public | IT City vs. Jasmine International Public | IT City vs. Hana Microelectronics Public | IT City vs. Italian Thai Development 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |