Correlation Between MFF Capital and Pact Group
Can any of the company-specific risk be diversified away by investing in both MFF Capital and Pact Group 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 Pact Group 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 Pact Group Holdings, you can compare the effects of market volatilities on MFF Capital and Pact Group 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 Pact Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Pact Group.
Diversification Opportunities for MFF Capital and Pact Group
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFF and Pact is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Pact Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pact Group Holdings 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 Pact Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pact Group Holdings has no effect on the direction of MFF Capital i.e., MFF Capital and Pact Group go up and down completely randomly.
Pair Corralation between MFF Capital and Pact Group
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.84 times more return on investment than Pact Group. However, MFF Capital Investments is 1.19 times less risky than Pact Group. It trades about 0.35 of its potential returns per unit of risk. Pact Group Holdings is currently generating about -0.08 per unit of risk. If you would invest 396.00 in MFF Capital Investments on September 1, 2024 and sell it today you would earn a total of 35.00 from holding MFF Capital Investments or generate 8.84% 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. Pact Group Holdings
Performance |
| Timeline |
| MFF Capital Investments |
| Pact Group Holdings |
MFF Capital and Pact Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Pact Group
The main advantage of trading using opposite MFF Capital and Pact Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital position performs unexpectedly, Pact Group 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 Pact Group will offset losses from the drop in Pact Group's long position.| MFF Capital vs. Stelar Metals | MFF Capital vs. Srj Technologies Group | MFF Capital vs. Autosports Group | MFF Capital vs. Perseus Mining |
| Pact Group vs. Northern Star Resources | Pact Group vs. Evolution Mining | Pact Group vs. Bluescope Steel | Pact Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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