Correlation Between Samart Public and MC Group

Can any of the company-specific risk be diversified away by investing in both Samart Public and MC 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 Samart Public and MC Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samart Public and MC Group Public, you can compare the effects of market volatilities on Samart Public and MC 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 Samart Public with a short position of MC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samart Public and MC Group.

Diversification Opportunities for Samart Public and MC Group

-0.24

Correlation Coefficient

Samart Public  MC Group

Very good diversification

The 3 months correlation between Samart and MC Group is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Samart Public and MC Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Group Public and Samart Public 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 Samart Public are associated (or correlated) with MC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MC Group Public has no effect on the direction of Samart Public i.e., Samart Public and MC Group go up and down completely randomly.

Pair Corralation between Samart Public and MC Group

Assuming the 90 days trading horizon Samart Public is expected to generate 1.16 times more return on investment than MC Group. However, Samart Public is 1.16 times more volatile than MC Group Public. It trades about 0.06 of its potential returns per unit of risk. MC Group Public is currently generating about -0.04 per unit of risk. If you would invest  690.00  in Samart Public on September 13, 2024 and sell it today you would earn a total of  40.00  from holding Samart Public or generate 5.8% return on investment over 90 days.

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

Samart Public  vs.  MC Group Public

Samart Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Samart Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting primary indicators, Samart Public may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MC Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MC Group Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, MC Group 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 Samart Public and MC Group

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

The idea behind Samart Public and MC Group 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.