Correlation Between MFF Capital and Alternative Investment
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Alternative Investment 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 Alternative Investment 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 Alternative Investment Trust, you can compare the effects of market volatilities on MFF Capital and Alternative Investment 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 Alternative Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Alternative Investment.
Diversification Opportunities for MFF Capital and Alternative Investment
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MFF and Alternative is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Alternative Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Investment 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 Alternative Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Investment has no effect on the direction of MFF Capital i.e., MFF Capital and Alternative Investment go up and down completely randomly.
Pair Corralation between MFF Capital and Alternative Investment
If you would invest 392.00 in MFF Capital Investments on August 29, 2024 and sell it today you would earn a total of 32.00 from holding MFF Capital Investments or generate 8.16% 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. Alternative Investment Trust
Performance |
| Timeline |
| MFF Capital Investments |
| Alternative Investment |
MFF Capital and Alternative Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Alternative Investment
The main advantage of trading using opposite MFF Capital and Alternative Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Alternative Investment 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 Alternative Investment will offset losses from the drop in Alternative Investment's long position.| MFF Capital vs. Australian Foundation Investment | MFF Capital vs. GQG Partners DRC | MFF Capital vs. Metrics Master Income | MFF Capital vs. L1 Long Short |
| Alternative Investment vs. National Australia Bank | Alternative Investment vs. National Australia Bank | Alternative Investment vs. Westpac Banking | Alternative Investment vs. National Australia Bank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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