Correlation Between LUX ISLAND and MCB GROUP
Can any of the company-specific risk be diversified away by investing in both LUX ISLAND and MCB 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 LUX ISLAND and MCB GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LUX ISLAND RESORTS and MCB GROUP LIMITED, you can compare the effects of market volatilities on LUX ISLAND and MCB 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 LUX ISLAND with a short position of MCB GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of LUX ISLAND and MCB GROUP.
Diversification Opportunities for LUX ISLAND and MCB GROUP
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LUX and MCB is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding LUX ISLAND RESORTS and MCB GROUP LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCB GROUP LIMITED and LUX ISLAND 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 LUX ISLAND RESORTS are associated (or correlated) with MCB GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCB GROUP LIMITED has no effect on the direction of LUX ISLAND i.e., LUX ISLAND and MCB GROUP go up and down completely randomly.
Pair Corralation between LUX ISLAND and MCB GROUP
Assuming the 90 days trading horizon LUX ISLAND is expected to generate 2.24 times less return on investment than MCB GROUP. In addition to that, LUX ISLAND is 1.8 times more volatile than MCB GROUP LIMITED. It trades about 0.03 of its total potential returns per unit of risk. MCB GROUP LIMITED is currently generating about 0.11 per unit of volatility. If you would invest 30,800 in MCB GROUP LIMITED on September 12, 2024 and sell it today you would earn a total of 13,700 from holding MCB GROUP LIMITED or generate 44.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.21% |
| Values | Daily Returns |
LUX ISLAND RESORTS vs. MCB GROUP LIMITED
Performance |
| Timeline |
| LUX ISLAND RESORTS |
| MCB GROUP LIMITED |
LUX ISLAND and MCB GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LUX ISLAND and MCB GROUP
The main advantage of trading using opposite LUX ISLAND and MCB GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LUX ISLAND position performs unexpectedly, MCB 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 MCB GROUP will offset losses from the drop in MCB GROUP's long position.| LUX ISLAND vs. FINCORP INVESTMENT LTD | LUX ISLAND vs. LOTTOTECH LTD | LUX ISLAND vs. PSG FINANCIAL SERVICES | LUX ISLAND vs. NEW MAURITIUS HOTELS |
| MCB GROUP vs. UNITED INVESTMENTS LTD | MCB GROUP vs. PHOENIX BEVERAGES LTD | MCB GROUP vs. QUALITY BEVERAGES LTD | MCB GROUP vs. FINCORP INVESTMENT LTD |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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