Correlation Between MFF Capital and Australian Strategic
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Australian Strategic 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 Australian Strategic 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 Australian Strategic Materials, you can compare the effects of market volatilities on MFF Capital and Australian Strategic 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 Australian Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Australian Strategic.
Diversification Opportunities for MFF Capital and Australian Strategic
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MFF and Australian is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Australian Strategic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Strategic 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 Australian Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Strategic has no effect on the direction of MFF Capital i.e., MFF Capital and Australian Strategic go up and down completely randomly.
Pair Corralation between MFF Capital and Australian Strategic
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.21 times more return on investment than Australian Strategic. However, MFF Capital Investments is 4.78 times less risky than Australian Strategic. It trades about 0.14 of its potential returns per unit of risk. Australian Strategic Materials is currently generating about -0.04 per unit of risk. If you would invest 238.00 in MFF Capital Investments on November 1, 2024 and sell it today you would earn a total of 236.00 from holding MFF Capital Investments or generate 99.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFF Capital Investments vs. Australian Strategic Materials
Performance |
| Timeline |
| MFF Capital Investments |
| Australian Strategic |
MFF Capital and Australian Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Australian Strategic
The main advantage of trading using opposite MFF Capital and Australian Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Australian Strategic 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 Australian Strategic will offset losses from the drop in Australian Strategic's long position.| MFF Capital vs. Australian Unity Office | MFF Capital vs. Magellan Financial Group | MFF Capital vs. Mount Gibson Iron | MFF Capital vs. Bank of Queensland |
| Australian Strategic vs. Regis Healthcare | Australian Strategic vs. AiMedia Technologies | Australian Strategic vs. Spirit Telecom | Australian Strategic vs. Autosports Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |