Correlation Between LIVESTOCK FEED and MCB GROUP

Can any of the company-specific risk be diversified away by investing in both LIVESTOCK FEED and MCB GROUP 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 LIVESTOCK FEED and MCB GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for LIVESTOCK FEED and MCB GROUP

-0.15

Correlation Coefficient

LIVESTOCK FEED  MCB GROUP

Good diversification

The 3 months correlation between LIVESTOCK and MCB is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding LIVESTOCK FEED LTD 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 LIVESTOCK FEED 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 LIVESTOCK FEED LTD 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 LIVESTOCK FEED i.e., LIVESTOCK FEED and MCB GROUP go up and down completely randomly.

Pair Corralation between LIVESTOCK FEED and MCB GROUP

Assuming the 90 days trading horizon LIVESTOCK FEED LTD is expected to under-perform the MCB GROUP. But the stock apears to be less risky and, when comparing its historical volatility, LIVESTOCK FEED LTD is 1.15 times less risky than MCB GROUP. The stock trades about -0.01 of its potential returns per unit of risk. The MCB GROUP LTD is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,015  in MCB GROUP LTD on September 26, 2024 and sell it today you would earn a total of  5.00  from holding MCB GROUP LTD or generate 0.49% return on investment over 90 days.

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

LIVESTOCK FEED LTD  vs.  MCB GROUP LTD

LIVESTOCK FEED LTD

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LIVESTOCK FEED LTD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, LIVESTOCK FEED is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

MCB GROUP LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCB GROUP LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with LIVESTOCK FEED and MCB GROUP

The main advantage of trading using opposite LIVESTOCK FEED and MCB GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIVESTOCK FEED 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 LIVESTOCK FEED LTD 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.