Correlation Between MFC Nichada and Yuasa Battery

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

Diversification Opportunities for MFC Nichada and Yuasa Battery

0.22

Correlation Coefficient

MFC Nichada  Yuasa Battery

Modest diversification

The 3 months correlation between MFC and Yuasa is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding MFC Nichada Thani Property and Yuasa Battery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuasa Battery 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 Yuasa Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuasa Battery Public has no effect on the direction of MFC Nichada i.e., MFC Nichada and Yuasa Battery go up and down completely randomly.

Pair Corralation between MFC Nichada and Yuasa Battery

Assuming the 90 days trading horizon MFC Nichada Thani Property is expected to generate 446.34 times more return on investment than Yuasa Battery. However, MFC Nichada is 446.34 times more volatile than Yuasa Battery Public. It trades about 0.51 of its potential returns per unit of risk. Yuasa Battery Public is currently generating about -0.24 per unit of risk. If you would invest  0.00  in MFC Nichada Thani Property on September 12, 2024 and sell it today you would earn a total of  474.00  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	Very Weak
Accuracy	83.61%
Values	Daily Returns

MFC Nichada Thani Property  vs.  Yuasa Battery Public

MFC Nichada Thani

Risk-Adjusted Performance

39 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MFC Nichada Thani Property are ranked lower than 39 (%) 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.

Yuasa Battery Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with MFC Nichada and Yuasa Battery

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

The idea behind MFC Nichada Thani Property and Yuasa Battery 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 Stocks Directory module to find actively traded stocks across global markets.