Correlation Between SiS Distribution and MFEC PCL
Can any of the company-specific risk be diversified away by investing in both SiS Distribution and MFEC PCL 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 SiS Distribution and MFEC PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SiS Distribution Public and MFEC PCL, you can compare the effects of market volatilities on SiS Distribution and MFEC PCL 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 SiS Distribution with a short position of MFEC PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SiS Distribution and MFEC PCL.
Diversification Opportunities for SiS Distribution and MFEC PCL
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SiS and MFEC is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SiS Distribution Public and MFEC PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFEC PCL and SiS Distribution 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 SiS Distribution Public are associated (or correlated) with MFEC PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFEC PCL has no effect on the direction of SiS Distribution i.e., SiS Distribution and MFEC PCL go up and down completely randomly.
Pair Corralation between SiS Distribution and MFEC PCL
Assuming the 90 days trading horizon SiS Distribution Public is expected to generate 3.22 times more return on investment than MFEC PCL. However, SiS Distribution is 3.22 times more volatile than MFEC PCL. It trades about 0.2 of its potential returns per unit of risk. MFEC PCL is currently generating about 0.03 per unit of risk. If you would invest 2,500 in SiS Distribution Public on August 29, 2024 and sell it today you would earn a total of 450.00 from holding SiS Distribution Public or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SiS Distribution Public vs. MFEC PCL
Performance |
| Timeline |
| SiS Distribution Public |
| MFEC PCL |
SiS Distribution and MFEC PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SiS Distribution and MFEC PCL
The main advantage of trading using opposite SiS Distribution and MFEC PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SiS Distribution position performs unexpectedly, MFEC PCL 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 MFEC PCL will offset losses from the drop in MFEC PCL's long position.| SiS Distribution vs. AP Public | SiS Distribution vs. Jasmine International Public | SiS Distribution vs. Asia Plus Group | SiS Distribution vs. Bangkok Aviation Fuel |
| MFEC PCL vs. AP Public | MFEC PCL vs. Jasmine International Public | MFEC PCL vs. Asia Plus Group | MFEC PCL vs. Bangkok Aviation Fuel |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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