Correlation Between MFC Asset and Forth Public

Can any of the company-specific risk be diversified away by investing in both MFC Asset and Forth Public 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 MFC Asset and Forth Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MFC Asset Management and Forth Public, you can compare the effects of market volatilities on MFC Asset and Forth Public 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 MFC Asset with a short position of Forth Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFC Asset and Forth Public.

Diversification Opportunities for MFC Asset and Forth Public

0.0

Correlation Coefficient

MFC Asset  Forth Public

Pay attention - limited upside

The 3 months correlation between MFC and Forth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MFC Asset Management and Forth Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forth Public and MFC Asset 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 MFC Asset Management are associated (or correlated) with Forth Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forth Public has no effect on the direction of MFC Asset i.e., MFC Asset and Forth Public go up and down completely randomly.

Pair Corralation between MFC Asset and Forth Public

Assuming the 90 days trading horizon MFC Asset Management is expected to generate 13.54 times more return on investment than Forth Public. However, MFC Asset is 13.54 times more volatile than Forth Public. It trades about 0.04 of its potential returns per unit of risk. Forth Public is currently generating about -0.06 per unit of risk. If you would invest  2,135  in MFC Asset Management on October 10, 2024 and sell it today you would earn a total of  765.00  from holding MFC Asset Management or generate 35.83% return on investment over 90 days.

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

MFC Asset Management  vs.  Forth Public

MFC Asset Management

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MFC Asset Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, MFC Asset may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Forth Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forth Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with MFC Asset and Forth Public

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

The idea behind MFC Asset Management and Forth Public 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.

Check out your portfolio center.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.