Correlation Between MFF Capital and Kinatico
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Kinatico 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 Kinatico 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 Kinatico, you can compare the effects of market volatilities on MFF Capital and Kinatico 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 Kinatico. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Kinatico.
Diversification Opportunities for MFF Capital and Kinatico
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFF and Kinatico is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Kinatico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinatico 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 Kinatico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinatico has no effect on the direction of MFF Capital i.e., MFF Capital and Kinatico go up and down completely randomly.
Pair Corralation between MFF Capital and Kinatico
Assuming the 90 days trading horizon MFF Capital is expected to generate 1.3 times less return on investment than Kinatico. But when comparing it to its historical volatility, MFF Capital Investments is 5.11 times less risky than Kinatico. It trades about 0.34 of its potential returns per unit of risk. Kinatico is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Kinatico on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Kinatico or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFF Capital Investments vs. Kinatico
Performance |
| Timeline |
| MFF Capital Investments |
| Kinatico |
MFF Capital and Kinatico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Kinatico
The main advantage of trading using opposite MFF Capital and Kinatico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Kinatico 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 Kinatico will offset losses from the drop in Kinatico's long position.| MFF Capital vs. Australian Foundation Investment | MFF Capital vs. GQG Partners DRC | MFF Capital vs. Metrics Master Income | MFF Capital vs. L1 Long Short |
| Kinatico vs. MFF Capital Investments | Kinatico vs. Flagship Investments | Kinatico vs. Alto Metals | Kinatico vs. Sandon Capital Investments |
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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