Correlation Between Noble Financials and MCI Management

Can any of the company-specific risk be diversified away by investing in both Noble Financials and MCI Management 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 Noble Financials and MCI Management into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Noble Financials SA and MCI Management SA, you can compare the effects of market volatilities on Noble Financials and MCI Management 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 Noble Financials with a short position of MCI Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Financials and MCI Management.

Diversification Opportunities for Noble Financials and MCI Management

0.67

Correlation Coefficient

Noble Financials  MCI Management

Poor diversification

The 3 months correlation between Noble and MCI is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Noble Financials SA and MCI Management SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCI Management SA and Noble Financials 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 Noble Financials SA are associated (or correlated) with MCI Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCI Management SA has no effect on the direction of Noble Financials i.e., Noble Financials and MCI Management go up and down completely randomly.

Pair Corralation between Noble Financials and MCI Management

Assuming the 90 days trading horizon Noble Financials SA is expected to under-perform the MCI Management. In addition to that, Noble Financials is 2.55 times more volatile than MCI Management SA. It trades about -0.16 of its total potential returns per unit of risk. MCI Management SA is currently generating about -0.12 per unit of volatility. If you would invest  2,540  in MCI Management SA on October 9, 2024 and sell it today you would lose (50.00) from holding MCI Management SA or give up 1.97% of portfolio value over 90 days.

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

Noble Financials SA  vs.  MCI Management SA

Noble Financials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble Financials SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

MCI Management SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCI Management SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Noble Financials and MCI Management

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

The idea behind Noble Financials SA and MCI Management SA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.