Correlation Between MFF Capital and Althea Group
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Althea Group 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 MFF Capital and Althea Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFF Capital Investments and Althea Group Holdings, you can compare the effects of market volatilities on MFF Capital and Althea Group 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 MFF Capital with a short position of Althea Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Althea Group.
Diversification Opportunities for MFF Capital and Althea Group
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MFF and Althea is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Althea Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Althea Group Holdings and MFF Capital 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 MFF Capital Investments are associated (or correlated) with Althea Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Althea Group Holdings has no effect on the direction of MFF Capital i.e., MFF Capital and Althea Group go up and down completely randomly.
Pair Corralation between MFF Capital and Althea Group
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.2 times more return on investment than Althea Group. However, MFF Capital Investments is 5.07 times less risky than Althea Group. It trades about 0.14 of its potential returns per unit of risk. Althea Group Holdings is currently generating about 0.0 per unit of risk. If you would invest 217.00 in MFF Capital Investments on September 4, 2024 and sell it today you would earn a total of 218.00 from holding MFF Capital Investments or generate 100.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFF Capital Investments vs. Althea Group Holdings
Performance |
| Timeline |
| MFF Capital Investments |
| Althea Group Holdings |
MFF Capital and Althea Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Althea Group
The main advantage of trading using opposite MFF Capital and Althea Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Althea Group 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 Althea Group will offset losses from the drop in Althea Group's long position.| MFF Capital vs. Global Health | MFF Capital vs. Healthco Healthcare and | MFF Capital vs. Beston Global Food | MFF Capital vs. BTC Health Limited |
| Althea Group vs. Iron Road | Althea Group vs. Viva Leisure | Althea Group vs. Auswide Bank | Althea Group vs. Aristocrat Leisure |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |