Correlation Between MFF Capital and Centuria Capital
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Centuria Capital 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 Centuria Capital 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 Centuria Capital, you can compare the effects of market volatilities on MFF Capital and Centuria Capital 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 Centuria Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Centuria Capital.
Diversification Opportunities for MFF Capital and Centuria Capital
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFF and Centuria is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Centuria Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuria Capital 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 Centuria Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuria Capital has no effect on the direction of MFF Capital i.e., MFF Capital and Centuria Capital go up and down completely randomly.
Pair Corralation between MFF Capital and Centuria Capital
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.53 times more return on investment than Centuria Capital. However, MFF Capital Investments is 1.88 times less risky than Centuria Capital. It trades about 0.15 of its potential returns per unit of risk. Centuria Capital is currently generating about 0.06 per unit of risk. If you would invest 291.00 in MFF Capital Investments on September 3, 2024 and sell it today you would earn a total of 144.00 from holding MFF Capital Investments or generate 49.48% 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. Centuria Capital
Performance |
| Timeline |
| MFF Capital Investments |
| Centuria Capital |
MFF Capital and Centuria Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Centuria Capital
The main advantage of trading using opposite MFF Capital and Centuria Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Centuria Capital 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 Centuria Capital will offset losses from the drop in Centuria Capital's long position.| MFF Capital vs. Mirrabooka Investments | MFF Capital vs. Carlton Investments | MFF Capital vs. Australian United Investment | MFF Capital vs. Platinum Asia Investments |
| Centuria Capital vs. G8 Education | Centuria Capital vs. Farm Pride Foods | Centuria Capital vs. Richmond Vanadium Technology | Centuria Capital vs. Qbe Insurance 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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