Correlation Between MC Group and Central Pattana

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

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

Diversification Opportunities for MC Group and Central Pattana

0.76

Correlation Coefficient

MC Group  Central Pattana

Poor diversification

The 3 months correlation between MC Group and Central is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding MC Group Public and Central Pattana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Pattana Public and MC Group 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 MC Group Public are associated (or correlated) with Central Pattana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Pattana Public has no effect on the direction of MC Group i.e., MC Group and Central Pattana go up and down completely randomly.

Pair Corralation between MC Group and Central Pattana

Assuming the 90 days horizon MC Group Public is expected to generate 1.07 times more return on investment than Central Pattana. However, MC Group is 1.07 times more volatile than Central Pattana Public. It trades about 0.0 of its potential returns per unit of risk. Central Pattana Public is currently generating about -0.06 per unit of risk. If you would invest  1,090  in MC Group Public on September 13, 2024 and sell it today you would earn a total of  0.00  from holding MC Group Public or generate 0.0% return on investment over 90 days.

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

MC Group Public  vs.  Central Pattana Public

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.

Central Pattana Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Central Pattana Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with MC Group and Central Pattana

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

The idea behind MC Group Public and Central Pattana 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 Transaction History module to view history of all your transactions and understand their impact on performance.