Correlation Between MFF Capital and GQG Partners
Can any of the company-specific risk be diversified away by investing in both MFF Capital and GQG Partners 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 GQG Partners 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 GQG Partners DRC, you can compare the effects of market volatilities on MFF Capital and GQG Partners 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 GQG Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and GQG Partners.
Diversification Opportunities for MFF Capital and GQG Partners
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFF and GQG is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and GQG Partners DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GQG Partners DRC 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 GQG Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GQG Partners DRC has no effect on the direction of MFF Capital i.e., MFF Capital and GQG Partners go up and down completely randomly.
Pair Corralation between MFF Capital and GQG Partners
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.22 times more return on investment than GQG Partners. However, MFF Capital Investments is 4.52 times less risky than GQG Partners. It trades about 0.33 of its potential returns per unit of risk. GQG Partners DRC is currently generating about -0.12 per unit of risk. If you would invest 392.00 in MFF Capital Investments on August 29, 2024 and sell it today you would earn a total of 32.00 from holding MFF Capital Investments or generate 8.16% 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. GQG Partners DRC
Performance |
| Timeline |
| MFF Capital Investments |
| GQG Partners DRC |
MFF Capital and GQG Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and GQG Partners
The main advantage of trading using opposite MFF Capital and GQG Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, GQG Partners 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 GQG Partners will offset losses from the drop in GQG Partners' long position.| MFF Capital vs. Aussie Broadband | MFF Capital vs. Regal Funds Management | MFF Capital vs. Platinum Asset Management | MFF Capital vs. Richmond Vanadium Technology |
| GQG Partners vs. Alto Metals | GQG Partners vs. Black Rock Mining | GQG Partners vs. Sky Metals | GQG Partners vs. Perseus Mining |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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