Correlation Between MFF Capital and Australian United
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Australian United 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 United 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 United Investment, you can compare the effects of market volatilities on MFF Capital and Australian United 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 United. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Australian United.
Diversification Opportunities for MFF Capital and Australian United
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MFF and Australian is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Australian United Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian United 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 United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian United has no effect on the direction of MFF Capital i.e., MFF Capital and Australian United go up and down completely randomly.
Pair Corralation between MFF Capital and Australian United
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.77 times more return on investment than Australian United. However, MFF Capital Investments is 1.3 times less risky than Australian United. It trades about 0.08 of its potential returns per unit of risk. Australian United Investment is currently generating about 0.05 per unit of risk. If you would invest 469.00 in MFF Capital Investments on November 4, 2024 and sell it today you would earn a total of 5.00 from holding MFF Capital Investments or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFF Capital Investments vs. Australian United Investment
Performance |
| Timeline |
| MFF Capital Investments |
| Australian United |
MFF Capital and Australian United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Australian United
The main advantage of trading using opposite MFF Capital and Australian United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Australian United 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 United will offset losses from the drop in Australian United's long position.| MFF Capital vs. Centaurus Metals | MFF Capital vs. Super Retail Group | MFF Capital vs. Gold Road Resources | MFF Capital vs. Iron Road |
| Australian United vs. Complii FinTech Solutions | Australian United vs. Stelar Metals | Australian United vs. Technology One | Australian United vs. Hansen Technologies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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