Correlation Between MCBC Holdings and Twin Vee

Can any of the company-specific risk be diversified away by investing in both MCBC Holdings and Twin Vee 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 MCBC Holdings and Twin Vee into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MCBC Holdings and Twin Vee Powercats, you can compare the effects of market volatilities on MCBC Holdings and Twin Vee 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 MCBC Holdings with a short position of Twin Vee. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCBC Holdings and Twin Vee.

Diversification Opportunities for MCBC Holdings and Twin Vee

0.12

Correlation Coefficient

MCBC Holdings  Twin Vee

Average diversification

The 3 months correlation between MCBC and Twin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding MCBC Holdings and Twin Vee Powercats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twin Vee Powercats and MCBC Holdings 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 MCBC Holdings are associated (or correlated) with Twin Vee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twin Vee Powercats has no effect on the direction of MCBC Holdings i.e., MCBC Holdings and Twin Vee go up and down completely randomly.

Pair Corralation between MCBC Holdings and Twin Vee

Given the investment horizon of 90 days MCBC Holdings is expected to generate 15.69 times less return on investment than Twin Vee. But when comparing it to its historical volatility, MCBC Holdings is 3.25 times less risky than Twin Vee. It trades about 0.01 of its potential returns per unit of risk. Twin Vee Powercats is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  37.00  in Twin Vee Powercats on December 24, 2024 and sell it today you would lose (2.00) from holding Twin Vee Powercats or give up 5.41% of portfolio value over 90 days.

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

MCBC Holdings  vs.  Twin Vee Powercats

MCBC Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days MCBC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, MCBC Holdings is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Twin Vee Powercats

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Twin Vee Powercats are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Twin Vee exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MCBC Holdings and Twin Vee

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

The idea behind MCBC Holdings and Twin Vee Powercats 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.