Correlation Between Tropical Canning and MFC Asset
Can any of the company-specific risk be diversified away by investing in both Tropical Canning 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 Tropical Canning and MFC Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tropical Canning Public and MFC Asset Management, you can compare the effects of market volatilities on Tropical Canning 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 Tropical Canning with a short position of MFC Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tropical Canning and MFC Asset.
Diversification Opportunities for Tropical Canning and MFC Asset
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tropical and MFC is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tropical Canning Public 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 Tropical Canning 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 Tropical Canning Public 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 Tropical Canning i.e., Tropical Canning and MFC Asset go up and down completely randomly.
Pair Corralation between Tropical Canning and MFC Asset
Assuming the 90 days horizon Tropical Canning is expected to generate 1.08 times less return on investment than MFC Asset. In addition to that, Tropical Canning is 1.0 times more volatile than MFC Asset Management. It trades about 0.04 of its total potential returns per unit of risk. MFC Asset Management is currently generating about 0.04 per unit of volatility. If you would invest 1,995 in MFC Asset Management on September 5, 2024 and sell it today you would earn a total of 805.00 from holding MFC Asset Management or generate 40.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tropical Canning Public vs. MFC Asset Management
Performance |
| Timeline |
| Tropical Canning Public |
| MFC Asset Management |
Tropical Canning and MFC Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tropical Canning and MFC Asset
The main advantage of trading using opposite Tropical Canning and MFC Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tropical Canning 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.| Tropical Canning vs. Thai Vegetable Oil | Tropical Canning vs. Tipco Foods Public | Tropical Canning vs. Haad Thip Public | Tropical Canning vs. SP Syndicate Public |
| MFC Asset vs. Thai Steel Cable | MFC Asset vs. Tropical Canning Public | MFC Asset vs. RB Food Supply | MFC Asset vs. Eureka Design Public |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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