Correlation Between MEBUKI FINANCIAL and TC Energy

Can any of the company-specific risk be diversified away by investing in both MEBUKI FINANCIAL and TC Energy 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 MEBUKI FINANCIAL and TC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MEBUKI FINANCIAL GROUP and TC Energy, you can compare the effects of market volatilities on MEBUKI FINANCIAL and TC Energy 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 MEBUKI FINANCIAL with a short position of TC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEBUKI FINANCIAL and TC Energy.

Diversification Opportunities for MEBUKI FINANCIAL and TC Energy

-0.06

Correlation Coefficient

MEBUKI FINANCIAL  TC Energy

Good diversification

The 3 months correlation between MEBUKI and TRS is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding MEBUKI FINANCIAL GROUP and TC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy and MEBUKI FINANCIAL 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 MEBUKI FINANCIAL GROUP are associated (or correlated) with TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy has no effect on the direction of MEBUKI FINANCIAL i.e., MEBUKI FINANCIAL and TC Energy go up and down completely randomly.

Pair Corralation between MEBUKI FINANCIAL and TC Energy

Assuming the 90 days horizon MEBUKI FINANCIAL GROUP is expected to generate 1.21 times more return on investment than TC Energy. However, MEBUKI FINANCIAL is 1.21 times more volatile than TC Energy. It trades about 0.08 of its potential returns per unit of risk. TC Energy is currently generating about 0.04 per unit of risk. If you would invest  344.00  in MEBUKI FINANCIAL GROUP on December 10, 2024 and sell it today you would earn a total of  58.00  from holding MEBUKI FINANCIAL GROUP or generate 16.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MEBUKI FINANCIAL GROUP  vs.  TC Energy

MEBUKI FINANCIAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days MEBUKI FINANCIAL GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MEBUKI FINANCIAL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

TC Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days TC Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TC Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MEBUKI FINANCIAL and TC Energy

The main advantage of trading using opposite MEBUKI FINANCIAL and TC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEBUKI FINANCIAL position performs unexpectedly, TC Energy 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 TC Energy will offset losses from the drop in TC Energy's long position.

The idea behind MEBUKI FINANCIAL GROUP and TC Energy 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.