Correlation Between MFF Capital and Nanosonics
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Nanosonics 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 Nanosonics 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 Nanosonics, you can compare the effects of market volatilities on MFF Capital and Nanosonics 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 Nanosonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Nanosonics.
Diversification Opportunities for MFF Capital and Nanosonics
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MFF and Nanosonics is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Nanosonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanosonics 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 Nanosonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanosonics has no effect on the direction of MFF Capital i.e., MFF Capital and Nanosonics go up and down completely randomly.
Pair Corralation between MFF Capital and Nanosonics
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.38 times more return on investment than Nanosonics. However, MFF Capital Investments is 2.64 times less risky than Nanosonics. It trades about 0.14 of its potential returns per unit of risk. Nanosonics is currently generating about 0.04 per unit of risk. If you would invest 357.00 in MFF Capital Investments on September 3, 2024 and sell it today you would earn a total of 78.00 from holding MFF Capital Investments or generate 21.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFF Capital Investments vs. Nanosonics
Performance |
| Timeline |
| MFF Capital Investments |
| Nanosonics |
MFF Capital and Nanosonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Nanosonics
The main advantage of trading using opposite MFF Capital and Nanosonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Nanosonics 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 Nanosonics will offset losses from the drop in Nanosonics' long position.| MFF Capital vs. Mirrabooka Investments | MFF Capital vs. Carlton Investments | MFF Capital vs. Australian United Investment | MFF Capital vs. Platinum Asia Investments |
| Nanosonics vs. Platinum Asset Management | Nanosonics vs. Regal Funds Management | Nanosonics vs. Microequities Asset Management | Nanosonics vs. Stelar Metals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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