Correlation Between MFC Nichada and Wp Energy

Can any of the company-specific risk be diversified away by investing in both MFC Nichada and Wp Energy 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 Wp Energy 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 Wp Energy Public, you can compare the effects of market volatilities on MFC Nichada and Wp Energy 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 Wp Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFC Nichada and Wp Energy.

Diversification Opportunities for MFC Nichada and Wp Energy

0.04

Correlation Coefficient

MFC Nichada  Wp Energy

Significant diversification

The 3 months correlation between MFC and Wp Energy is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding MFC Nichada Thani Property and Wp Energy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wp Energy Public 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 Wp Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wp Energy Public has no effect on the direction of MFC Nichada i.e., MFC Nichada and Wp Energy go up and down completely randomly.

Pair Corralation between MFC Nichada and Wp Energy

Assuming the 90 days trading horizon MFC Nichada Thani Property is expected to generate 342.56 times more return on investment than Wp Energy. However, MFC Nichada is 342.56 times more volatile than Wp Energy Public. It trades about 0.4 of its potential returns per unit of risk. Wp Energy Public is currently generating about 0.0 per unit of risk. If you would invest  0.00  in MFC Nichada Thani Property on December 30, 2024 and sell it today you would earn a total of  492.00  from holding MFC Nichada Thani Property or generate 9.223372036854776E16% return on investment over 90 days.

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

MFC Nichada Thani Property  vs.  Wp Energy Public

MFC Nichada Thani

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MFC Nichada Thani Property are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, MFC Nichada sustained solid returns over the last few months and may actually be approaching a breakup point.

Wp Energy Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wp Energy Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Wp Energy is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MFC Nichada and Wp Energy

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

The idea behind MFC Nichada Thani Property and Wp Energy 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.