Correlation Between MFF Capital and Group 6
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Group 6 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 Group 6 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 Group 6 Metals, you can compare the effects of market volatilities on MFF Capital and Group 6 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 Group 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Group 6.
Diversification Opportunities for MFF Capital and Group 6
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFF and Group is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Group 6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 6 Metals 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 Group 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 6 Metals has no effect on the direction of MFF Capital i.e., MFF Capital and Group 6 go up and down completely randomly.
Pair Corralation between MFF Capital and Group 6
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.17 times more return on investment than Group 6. However, MFF Capital Investments is 5.79 times less risky than Group 6. It trades about 0.15 of its potential returns per unit of risk. Group 6 Metals is currently generating about -0.05 per unit of risk. If you would invest 250.00 in MFF Capital Investments on September 1, 2024 and sell it today you would earn a total of 181.00 from holding MFF Capital Investments or generate 72.4% 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. Group 6 Metals
Performance |
| Timeline |
| MFF Capital Investments |
| Group 6 Metals |
MFF Capital and Group 6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Group 6
The main advantage of trading using opposite MFF Capital and Group 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Group 6 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 Group 6 will offset losses from the drop in Group 6's long position.| MFF Capital vs. Stelar Metals | MFF Capital vs. Srj Technologies Group | MFF Capital vs. Autosports Group | MFF Capital vs. Perseus Mining |
| Group 6 vs. Northern Star Resources | Group 6 vs. Evolution Mining | Group 6 vs. Bluescope Steel | Group 6 vs. Sandfire Resources NL |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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