Correlation Between MFF Capital and Oceania Healthcare
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Oceania Healthcare 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 Oceania Healthcare 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 Oceania Healthcare, you can compare the effects of market volatilities on MFF Capital and Oceania Healthcare 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 Oceania Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Oceania Healthcare.
Diversification Opportunities for MFF Capital and Oceania Healthcare
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFF and Oceania is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Oceania Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceania Healthcare 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 Oceania Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceania Healthcare has no effect on the direction of MFF Capital i.e., MFF Capital and Oceania Healthcare go up and down completely randomly.
Pair Corralation between MFF Capital and Oceania Healthcare
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.34 times more return on investment than Oceania Healthcare. However, MFF Capital Investments is 2.97 times less risky than Oceania Healthcare. It trades about 0.16 of its potential returns per unit of risk. Oceania Healthcare is currently generating about 0.01 per unit of risk. If you would invest 210.00 in MFF Capital Investments on September 13, 2024 and sell it today you would earn a total of 236.00 from holding MFF Capital Investments or generate 112.38% 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. Oceania Healthcare
Performance |
| Timeline |
| MFF Capital Investments |
| Oceania Healthcare |
MFF Capital and Oceania Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Oceania Healthcare
The main advantage of trading using opposite MFF Capital and Oceania Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Oceania Healthcare 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 Oceania Healthcare will offset losses from the drop in Oceania Healthcare's long position.| MFF Capital vs. Fisher Paykel Healthcare | MFF Capital vs. EVE Health Group | MFF Capital vs. BTC Health Limited | MFF Capital vs. Mirrabooka Investments |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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