Correlation Between MC Group and Multibax Public

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

Diversification Opportunities for MC Group and Multibax Public

0.44

Correlation Coefficient

MC Group  Multibax Public

Very weak diversification

The 3 months correlation between MC Group and Multibax is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding MC Group Public and Multibax Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multibax 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 Multibax Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multibax Public has no effect on the direction of MC Group i.e., MC Group and Multibax Public go up and down completely randomly.

Pair Corralation between MC Group and Multibax Public

Assuming the 90 days horizon MC Group Public is expected to under-perform the Multibax Public. But the stock apears to be less risky and, when comparing its historical volatility, MC Group Public is 82.51 times less risky than Multibax Public. The stock trades about 0.0 of its potential returns per unit of risk. The Multibax Public is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Multibax Public on September 3, 2024 and sell it today you would earn a total of  198.00  from holding Multibax Public or generate 9.223372036854776E16% return on investment over 90 days.

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

MC Group Public  vs.  Multibax 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 current stock price mess, may contribute to short-term losses for the institutional investors.

Multibax Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Multibax Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Multibax Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MC Group and Multibax Public

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

The idea behind MC Group Public and Multibax 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.