Correlation Between SAF Special and MFC Asset
Can any of the company-specific risk be diversified away by investing in both SAF Special and MFC Asset 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 SAF Special and MFC Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAF Special Steel and MFC Asset Management, you can compare the effects of market volatilities on SAF Special and MFC Asset 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 SAF Special with a short position of MFC Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAF Special and MFC Asset.
Diversification Opportunities for SAF Special and MFC Asset
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between SAF and MFC is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding SAF Special Steel and MFC Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFC Asset Management and SAF Special 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 SAF Special Steel are associated (or correlated) with MFC Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFC Asset Management has no effect on the direction of SAF Special i.e., SAF Special and MFC Asset go up and down completely randomly.
Pair Corralation between SAF Special and MFC Asset
Assuming the 90 days trading horizon SAF Special Steel is expected to under-perform the MFC Asset. But the stock apears to be less risky and, when comparing its historical volatility, SAF Special Steel is 12.91 times less risky than MFC Asset. The stock trades about -0.08 of its potential returns per unit of risk. The MFC Asset Management is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,012 in MFC Asset Management on September 14, 2024 and sell it today you would earn a total of 713.00 from holding MFC Asset Management or generate 35.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.46% |
| Values | Daily Returns |
SAF Special Steel vs. MFC Asset Management
Performance |
| Timeline |
| SAF Special Steel |
| MFC Asset Management |
SAF Special and MFC Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAF Special and MFC Asset
The main advantage of trading using opposite SAF Special and MFC Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAF Special position performs unexpectedly, MFC Asset 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 MFC Asset will offset losses from the drop in MFC Asset's long position.| SAF Special vs. Ratchthani Leasing Public | SAF Special vs. LH Hotel Leasehold | SAF Special vs. BA Airport Leasehold | SAF Special vs. KTBST Mixed Leasehold |
| MFC Asset vs. KGI Securities Public | MFC Asset vs. Lam Soon Public | MFC Asset vs. Lalin Property Public | MFC Asset vs. Hwa Fong Rubber |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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