Correlation Between MFC Nichada and MFC Industrial
Can any of the company-specific risk be diversified away by investing in both MFC Nichada and MFC Industrial 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 Nichada and MFC Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFC Nichada Thani Property and MFC Industrial Investment, you can compare the effects of market volatilities on MFC Nichada and MFC Industrial 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 Nichada with a short position of MFC Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFC Nichada and MFC Industrial.
Diversification Opportunities for MFC Nichada and MFC Industrial
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MFC and MFC is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding MFC Nichada Thani Property and MFC Industrial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFC Industrial Investment and MFC Nichada 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 Nichada Thani Property are associated (or correlated) with MFC Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFC Industrial Investment has no effect on the direction of MFC Nichada i.e., MFC Nichada and MFC Industrial go up and down completely randomly.
Pair Corralation between MFC Nichada and MFC Industrial
Assuming the 90 days trading horizon MFC Nichada Thani Property is expected to generate 0.2 times more return on investment than MFC Industrial. However, MFC Nichada Thani Property is 5.03 times less risky than MFC Industrial. It trades about -0.08 of its potential returns per unit of risk. MFC Industrial Investment is currently generating about -0.14 per unit of risk. If you would invest 230.00 in MFC Nichada Thani Property on December 2, 2024 and sell it today you would lose (30.00) from holding MFC Nichada Thani Property or give up 13.04% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MFC Nichada Thani Property vs. MFC Industrial Investment
Performance |
Timeline |
MFC Nichada Thani |
MFC Industrial Investment |
MFC Nichada and MFC Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MFC Nichada and MFC Industrial
The main advantage of trading using opposite MFC Nichada and MFC Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFC Nichada position performs unexpectedly, MFC Industrial 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 MFC Industrial will offset losses from the drop in MFC Industrial's long position.MFC Nichada vs. Land and Houses | MFC Nichada vs. Major Cineplex Lifestyle | MFC Nichada vs. LH Shopping Centers | MFC Nichada vs. MFC Nichada Thani Property |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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