Correlation Between MFF Capital and Havilah Resources
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Havilah Resources 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 Havilah Resources 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 Havilah Resources, you can compare the effects of market volatilities on MFF Capital and Havilah Resources 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 Havilah Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Havilah Resources.
Diversification Opportunities for MFF Capital and Havilah Resources
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MFF and Havilah is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Havilah Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havilah Resources 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 Havilah Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havilah Resources has no effect on the direction of MFF Capital i.e., MFF Capital and Havilah Resources go up and down completely randomly.
Pair Corralation between MFF Capital and Havilah Resources
Assuming the 90 days trading horizon MFF Capital is expected to generate 1.52 times less return on investment than Havilah Resources. But when comparing it to its historical volatility, MFF Capital Investments is 3.55 times less risky than Havilah Resources. It trades about 0.17 of its potential returns per unit of risk. Havilah Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Havilah Resources on September 15, 2024 and sell it today you would earn a total of 6.00 from holding Havilah Resources or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFF Capital Investments vs. Havilah Resources
Performance |
| Timeline |
| MFF Capital Investments |
| Havilah Resources |
MFF Capital and Havilah Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Havilah Resources
The main advantage of trading using opposite MFF Capital and Havilah Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Havilah Resources 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 Havilah Resources will offset losses from the drop in Havilah Resources' long position.| MFF Capital vs. Australian Foundation Investment | MFF Capital vs. Metrics Master Income | MFF Capital vs. L1 Long Short | MFF Capital vs. Wam Leaders |
| Havilah Resources vs. Northern Star Resources | Havilah Resources vs. Evolution Mining | Havilah Resources vs. Bluescope Steel | Havilah Resources 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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