Correlation Between MPC Container and Nekkar Asa

Can any of the company-specific risk be diversified away by investing in both MPC Container and Nekkar Asa 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 MPC Container and Nekkar Asa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MPC Container Ships and Nekkar Asa, you can compare the effects of market volatilities on MPC Container and Nekkar Asa 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 MPC Container with a short position of Nekkar Asa. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPC Container and Nekkar Asa.

Diversification Opportunities for MPC Container and Nekkar Asa

0.06

Correlation Coefficient

MPC Container  Nekkar Asa

Significant diversification

The 3 months correlation between MPC and Nekkar is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding MPC Container Ships and Nekkar Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nekkar Asa and MPC Container 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 MPC Container Ships are associated (or correlated) with Nekkar Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nekkar Asa has no effect on the direction of MPC Container i.e., MPC Container and Nekkar Asa go up and down completely randomly.

Pair Corralation between MPC Container and Nekkar Asa

Assuming the 90 days trading horizon MPC Container Ships is expected to generate 1.32 times more return on investment than Nekkar Asa. However, MPC Container is 1.32 times more volatile than Nekkar Asa. It trades about 0.06 of its potential returns per unit of risk. Nekkar Asa is currently generating about 0.05 per unit of risk. If you would invest  929.00  in MPC Container Ships on December 2, 2024 and sell it today you would earn a total of  865.00  from holding MPC Container Ships or generate 93.11% return on investment over 90 days.

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

MPC Container Ships  vs.  Nekkar Asa

MPC Container Ships

Risk-Adjusted Performance

Very Weak

Over the last 90 days MPC Container Ships has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Nekkar Asa

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nekkar Asa are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Nekkar Asa is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MPC Container and Nekkar Asa

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

The idea behind MPC Container Ships and Nekkar Asa 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 Transaction History module to view history of all your transactions and understand their impact on performance.