Correlation Between MFEC PCL and Internet Thailand

Can any of the company-specific risk be diversified away by investing in both MFEC PCL and Internet Thailand 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 MFEC PCL and Internet Thailand into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for MFEC PCL and Internet Thailand

0.19

Correlation Coefficient

MFEC PCL  Internet Thailand

Average diversification

The 3 months correlation between MFEC and Internet is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding MFEC PCL and Internet Thailand Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Thailand Public and MFEC PCL 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 MFEC PCL are associated (or correlated) with Internet Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Thailand Public has no effect on the direction of MFEC PCL i.e., MFEC PCL and Internet Thailand go up and down completely randomly.

Pair Corralation between MFEC PCL and Internet Thailand

Assuming the 90 days trading horizon MFEC PCL is expected to generate 0.31 times more return on investment than Internet Thailand. However, MFEC PCL is 3.25 times less risky than Internet Thailand. It trades about -0.11 of its potential returns per unit of risk. Internet Thailand Public is currently generating about -0.1 per unit of risk. If you would invest  590.00  in MFEC PCL on October 24, 2024 and sell it today you would lose (15.00) from holding MFEC PCL or give up 2.54% of portfolio value over 90 days.

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

MFEC PCL  vs.  Internet Thailand Public

MFEC PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MFEC PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Internet Thailand Public

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Internet Thailand Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Internet Thailand disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MFEC PCL and Internet Thailand

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

The idea behind MFEC PCL and Internet Thailand 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.