Correlation Between MF International and Hurco Companies

Can any of the company-specific risk be diversified away by investing in both MF International and Hurco Companies 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 MF International and Hurco Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between mF International Limited and Hurco Companies, you can compare the effects of market volatilities on MF International and Hurco Companies 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 MF International with a short position of Hurco Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MF International and Hurco Companies.

Diversification Opportunities for MF International and Hurco Companies

0.23

Correlation Coefficient

MF International  Hurco Companies

Modest diversification

The 3 months correlation between MFI and Hurco is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding mF International Limited and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies and MF International 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 mF International Limited are associated (or correlated) with Hurco Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurco Companies has no effect on the direction of MF International i.e., MF International and Hurco Companies go up and down completely randomly.

Pair Corralation between MF International and Hurco Companies

Considering the 90-day investment horizon mF International Limited is expected to generate 1.19 times more return on investment than Hurco Companies. However, MF International is 1.19 times more volatile than Hurco Companies. It trades about 0.06 of its potential returns per unit of risk. Hurco Companies is currently generating about -0.16 per unit of risk. If you would invest  73.00  in mF International Limited on September 18, 2024 and sell it today you would earn a total of  2.00  from holding mF International Limited or generate 2.74% return on investment over 90 days.

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

mF International Limited  vs.  Hurco Companies

mF International

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in mF International Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical and fundamental indicators, MF International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hurco Companies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hurco Companies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Hurco Companies is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MF International and Hurco Companies

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

The idea behind mF International Limited and Hurco Companies 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.