Correlation Between MCB GROUP and PHOENIX INVESTMENT

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

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

Diversification Opportunities for MCB GROUP and PHOENIX INVESTMENT

-0.63

Correlation Coefficient

MCB GROUP  PHOENIX INVESTMENT

Excellent diversification

The 3 months correlation between MCB and PHOENIX is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding MCB GROUP LTD and PHOENIX INVESTMENT PANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHOENIX INVESTMENT PANY and MCB GROUP 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 MCB GROUP LTD are associated (or correlated) with PHOENIX INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHOENIX INVESTMENT PANY has no effect on the direction of MCB GROUP i.e., MCB GROUP and PHOENIX INVESTMENT go up and down completely randomly.

Pair Corralation between MCB GROUP and PHOENIX INVESTMENT

Assuming the 90 days trading horizon MCB GROUP LTD is expected to under-perform the PHOENIX INVESTMENT. But the stock apears to be less risky and, when comparing its historical volatility, MCB GROUP LTD is 1.95 times less risky than PHOENIX INVESTMENT. The stock trades about -0.23 of its potential returns per unit of risk. The PHOENIX INVESTMENT PANY is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  37,000  in PHOENIX INVESTMENT PANY on September 25, 2024 and sell it today you would earn a total of  3,900  from holding PHOENIX INVESTMENT PANY or generate 10.54% return on investment over 90 days.

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

MCB GROUP LTD  vs.  PHOENIX INVESTMENT PANY

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.

PHOENIX INVESTMENT PANY

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in PHOENIX INVESTMENT PANY are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, PHOENIX INVESTMENT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MCB GROUP and PHOENIX INVESTMENT

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

The idea behind MCB GROUP LTD and PHOENIX INVESTMENT PANY 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.