Correlation Between MFF Capital and Autosports
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Autosports 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 Autosports 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 Autosports Group, you can compare the effects of market volatilities on MFF Capital and Autosports 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 Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Autosports.
Diversification Opportunities for MFF Capital and Autosports
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFF and Autosports is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group 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 Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of MFF Capital i.e., MFF Capital and Autosports go up and down completely randomly.
Pair Corralation between MFF Capital and Autosports
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.58 times more return on investment than Autosports. However, MFF Capital Investments is 1.73 times less risky than Autosports. It trades about 0.16 of its potential returns per unit of risk. Autosports Group is currently generating about -0.02 per unit of risk. If you would invest 271.00 in MFF Capital Investments on September 1, 2024 and sell it today you would earn a total of 160.00 from holding MFF Capital Investments or generate 59.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFF Capital Investments vs. Autosports Group
Performance |
| Timeline |
| MFF Capital Investments |
| Autosports Group |
MFF Capital and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Autosports
The main advantage of trading using opposite MFF Capital and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Autosports 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 Autosports will offset losses from the drop in Autosports' long position.| MFF Capital vs. Stelar Metals | MFF Capital vs. Srj Technologies Group | MFF Capital vs. Autosports Group | MFF Capital vs. Perseus Mining |
| Autosports vs. Summit Resources Limited | Autosports vs. iShares Global Healthcare | Autosports vs. Australian Dairy Farms | Autosports vs. Adriatic Metals Plc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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