Correlation Between S Hotels and MFC Industrial
Can any of the company-specific risk be diversified away by investing in both S Hotels and MFC Industrial 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 S Hotels and MFC Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between S Hotels and and MFC Industrial Investment, you can compare the effects of market volatilities on S Hotels and MFC Industrial 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 S Hotels with a short position of MFC Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of S Hotels and MFC Industrial.
Diversification Opportunities for S Hotels and MFC Industrial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SHR and MFC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding S Hotels and and MFC Industrial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFC Industrial Investment and S Hotels 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 S Hotels and are associated (or correlated) with MFC Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFC Industrial Investment has no effect on the direction of S Hotels i.e., S Hotels and MFC Industrial go up and down completely randomly.
Pair Corralation between S Hotels and MFC Industrial
Assuming the 90 days trading horizon S Hotels and is expected to under-perform the MFC Industrial. In addition to that, S Hotels is 1.74 times more volatile than MFC Industrial Investment. It trades about -0.04 of its total potential returns per unit of risk. MFC Industrial Investment is currently generating about 0.02 per unit of volatility. If you would invest 583.00 in MFC Industrial Investment on September 2, 2024 and sell it today you would earn a total of 52.00 from holding MFC Industrial Investment or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
S Hotels and vs. MFC Industrial Investment
Performance |
| Timeline |
| S Hotels |
| MFC Industrial Investment |
S Hotels and MFC Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S Hotels and MFC Industrial
The main advantage of trading using opposite S Hotels and MFC Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S Hotels position performs unexpectedly, MFC Industrial 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 Industrial will offset losses from the drop in MFC Industrial's long position.| S Hotels vs. Central Plaza Hotel | S Hotels vs. The Erawan Group | S Hotels vs. Minor International Public | S Hotels vs. Advanced Info Service |
| MFC Industrial vs. MFC Nichada Thani Property | MFC Industrial vs. LH Shopping Centers | MFC Industrial vs. MFC Strategic Storage | MFC Industrial vs. HEMARAJ INDUSTRIAL PROPERTY |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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