Correlation Between MCB GROUP and BEAU VALLON

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

By analyzing existing cross correlation between MCB GROUP LIMITED and BEAU VALLON HOSPITAL, you can compare the effects of market volatilities on MCB GROUP and BEAU VALLON 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 BEAU VALLON. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCB GROUP and BEAU VALLON.

Diversification Opportunities for MCB GROUP and BEAU VALLON

0.14

Correlation Coefficient

MCB GROUP  BEAU VALLON

Average diversification

The 3 months correlation between MCB and BEAU is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding MCB GROUP LIMITED and BEAU VALLON HOSPITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEAU VALLON HOSPITAL 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 LIMITED are associated (or correlated) with BEAU VALLON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEAU VALLON HOSPITAL has no effect on the direction of MCB GROUP i.e., MCB GROUP and BEAU VALLON go up and down completely randomly.

Pair Corralation between MCB GROUP and BEAU VALLON

Assuming the 90 days trading horizon MCB GROUP is expected to generate 1.84 times less return on investment than BEAU VALLON. But when comparing it to its historical volatility, MCB GROUP LIMITED is 1.47 times less risky than BEAU VALLON. It trades about 0.17 of its potential returns per unit of risk. BEAU VALLON HOSPITAL is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  300.00  in BEAU VALLON HOSPITAL on September 28, 2024 and sell it today you would earn a total of  10.00  from holding BEAU VALLON HOSPITAL or generate 3.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

MCB GROUP LIMITED  vs.  BEAU VALLON HOSPITAL

MCB GROUP LIMITED

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MCB GROUP LIMITED are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, MCB GROUP is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

BEAU VALLON HOSPITAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BEAU VALLON HOSPITAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, BEAU VALLON is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with MCB GROUP and BEAU VALLON

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

The idea behind MCB GROUP LIMITED and BEAU VALLON HOSPITAL 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.