Correlation Between MCB Investment and First Credit

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

By analyzing existing cross correlation between MCB Investment Manag and First Credit And, you can compare the effects of market volatilities on MCB Investment and First Credit 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 Investment with a short position of First Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCB Investment and First Credit.

Diversification Opportunities for MCB Investment and First Credit

0.36

Correlation Coefficient

MCB Investment  First Credit

Weak diversification

The 3 months correlation between MCB and First is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding MCB Investment Manag and First Credit And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Credit And and MCB Investment 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 Investment Manag are associated (or correlated) with First Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Credit And has no effect on the direction of MCB Investment i.e., MCB Investment and First Credit go up and down completely randomly.

Pair Corralation between MCB Investment and First Credit

Assuming the 90 days trading horizon MCB Investment Manag is expected to generate 0.62 times more return on investment than First Credit. However, MCB Investment Manag is 1.62 times less risky than First Credit. It trades about 0.25 of its potential returns per unit of risk. First Credit And is currently generating about 0.03 per unit of risk. If you would invest  4,001  in MCB Investment Manag on October 24, 2024 and sell it today you would earn a total of  2,788  from holding MCB Investment Manag or generate 69.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.32%
Values	Daily Returns

MCB Investment Manag  vs.  First Credit And

MCB Investment Manag

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MCB Investment Manag are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, MCB Investment disclosed solid returns over the last few months and may actually be approaching a breakup point.

First Credit And

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Credit And are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, First Credit disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MCB Investment and First Credit

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

The idea behind MCB Investment Manag and First Credit And 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.