Correlation Between ABACUS STORAGE and MFF Capital

Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE and MFF Capital 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 ABACUS STORAGE and MFF Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ABACUS STORAGE KING and MFF Capital Investments, you can compare the effects of market volatilities on ABACUS STORAGE and MFF Capital 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 ABACUS STORAGE with a short position of MFF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and MFF Capital.

Diversification Opportunities for ABACUS STORAGE and MFF Capital

-0.86

Correlation Coefficient

ABACUS STORAGE  MFF Capital

Pay attention - limited upside

The 3 months correlation between ABACUS and MFF is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and MFF Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFF Capital Investments and ABACUS STORAGE 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 ABACUS STORAGE KING are associated (or correlated) with MFF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFF Capital Investments has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and MFF Capital go up and down completely randomly.

Pair Corralation between ABACUS STORAGE and MFF Capital

Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to under-perform the MFF Capital. In addition to that, ABACUS STORAGE is 1.42 times more volatile than MFF Capital Investments. It trades about -0.12 of its total potential returns per unit of risk. MFF Capital Investments is currently generating about 0.29 per unit of volatility. If you would invest  422.00  in MFF Capital Investments on September 12, 2024 and sell it today you would earn a total of  24.00  from holding MFF Capital Investments or generate 5.69% return on investment over 90 days.

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

ABACUS STORAGE KING  vs.  MFF Capital Investments

ABACUS STORAGE KING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABACUS STORAGE KING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

MFF Capital Investments

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MFF Capital Investments are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, MFF Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ABACUS STORAGE and MFF Capital

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

The idea behind ABACUS STORAGE KING and MFF Capital Investments 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..