Correlation Between MF International and Cadence Design
Can any of the company-specific risk be diversified away by investing in both MF International and Cadence Design 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 MF International and Cadence Design into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mF International Limited and Cadence Design Systems, you can compare the effects of market volatilities on MF International and Cadence Design 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 MF International with a short position of Cadence Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of MF International and Cadence Design.
Diversification Opportunities for MF International and Cadence Design
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFI and Cadence is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding mF International Limited and Cadence Design Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence Design Systems and MF International 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 mF International Limited are associated (or correlated) with Cadence Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Design Systems has no effect on the direction of MF International i.e., MF International and Cadence Design go up and down completely randomly.
Pair Corralation between MF International and Cadence Design
Considering the 90-day investment horizon mF International Limited is expected to generate 2.32 times more return on investment than Cadence Design. However, MF International is 2.32 times more volatile than Cadence Design Systems. It trades about 0.05 of its potential returns per unit of risk. Cadence Design Systems is currently generating about 0.08 per unit of risk. If you would invest 64.00 in mF International Limited on September 25, 2024 and sell it today you would earn a total of 6.00 from holding mF International Limited or generate 9.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
mF International Limited vs. Cadence Design Systems
Performance |
Timeline |
mF International |
Cadence Design Systems |
MF International and Cadence Design Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MF International and Cadence Design
The main advantage of trading using opposite MF International and Cadence Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MF International position performs unexpectedly, Cadence Design 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 Cadence Design will offset losses from the drop in Cadence Design's long position.MF International vs. Unity Software | MF International vs. Daily Journal Corp | MF International vs. C3 Ai Inc | MF International vs. A2Z Smart Technologies |
Cadence Design vs. Dubber Limited | Cadence Design vs. Advanced Health Intelligence | Cadence Design vs. Danavation Technologies Corp | Cadence Design vs. BASE Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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