Correlation Between SUN and MCB GROUP
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By analyzing existing cross correlation between SUN LIMITED and MCB GROUP LTD, you can compare the effects of market volatilities on SUN 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 SUN with a short position of MCB GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN and MCB GROUP.
Diversification Opportunities for SUN and MCB GROUP
Modest diversification
The 3 months correlation between SUN and MCB is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SUN LIMITED and MCB GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCB GROUP LTD and SUN 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 SUN LIMITED 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 LTD has no effect on the direction of SUN i.e., SUN and MCB GROUP go up and down completely randomly.
Pair Corralation between SUN and MCB GROUP
Assuming the 90 days trading horizon SUN LIMITED is expected to generate 2.92 times more return on investment than MCB GROUP. However, SUN is 2.92 times more volatile than MCB GROUP LTD. It trades about 0.04 of its potential returns per unit of risk. MCB GROUP LTD is currently generating about 0.01 per unit of risk. If you would invest 2,710 in SUN LIMITED on September 2, 2024 and sell it today you would earn a total of 1,185 from holding SUN LIMITED or generate 43.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.37% |
| Values | Daily Returns |
SUN LIMITED vs. MCB GROUP LTD
Performance |
| Timeline |
| SUN LIMITED |
| MCB GROUP LTD |
SUN and MCB GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUN and MCB GROUP
The main advantage of trading using opposite SUN and MCB GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN 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.The idea behind SUN LIMITED and MCB GROUP LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MCB GROUP vs. FINCORP INVESTMENT LTD | MCB GROUP vs. CAUDAN DEVELOPMENT LTD | MCB GROUP vs. LUX ISLAND RESORTS | MCB GROUP vs. NEW MAURITIUS HOTELS |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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