Correlation Between PSG FINANCIAL and MCB GROUP

Can any of the company-specific risk be diversified away by investing in both PSG FINANCIAL and MCB GROUP 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 PSG FINANCIAL and MCB GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PSG FINANCIAL SERVICES and MCB GROUP LTD, you can compare the effects of market volatilities on PSG FINANCIAL and MCB GROUP 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 PSG FINANCIAL with a short position of MCB GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of PSG FINANCIAL and MCB GROUP.

Diversification Opportunities for PSG FINANCIAL and MCB GROUP

0.0

Correlation Coefficient

PSG FINANCIAL  MCB GROUP

Pay attention - limited upside

The 3 months correlation between PSG and MCB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PSG FINANCIAL SERVICES and MCB GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCB GROUP LTD and PSG FINANCIAL 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 PSG FINANCIAL SERVICES are associated (or correlated) with MCB GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCB GROUP LTD has no effect on the direction of PSG FINANCIAL i.e., PSG FINANCIAL and MCB GROUP go up and down completely randomly.

Pair Corralation between PSG FINANCIAL and MCB GROUP

If you would invest  1,015  in MCB GROUP LTD on September 26, 2024 and sell it today you would earn a total of  5.00  from holding MCB GROUP LTD or generate 0.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	76.53%
Values	Daily Returns

PSG FINANCIAL SERVICES  vs.  MCB GROUP LTD

PSG FINANCIAL SERVICES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PSG FINANCIAL SERVICES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, PSG FINANCIAL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

MCB GROUP LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCB GROUP LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with PSG FINANCIAL and MCB GROUP

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

The idea behind PSG FINANCIAL SERVICES and MCB GROUP LTD 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.