Correlation Between MFC Nichada and Golden Ventures

Can any of the company-specific risk be diversified away by investing in both MFC Nichada and Golden Ventures 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 MFC Nichada and Golden Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MFC Nichada Thani Property and Golden Ventures Leasehold, you can compare the effects of market volatilities on MFC Nichada and Golden Ventures 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 MFC Nichada with a short position of Golden Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFC Nichada and Golden Ventures.

Diversification Opportunities for MFC Nichada and Golden Ventures

0.18

Correlation Coefficient

MFC Nichada  Golden Ventures

Average diversification

The 3 months correlation between MFC and Golden is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding MFC Nichada Thani Property and Golden Ventures Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Ventures Leasehold and MFC Nichada 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 MFC Nichada Thani Property are associated (or correlated) with Golden Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Ventures Leasehold has no effect on the direction of MFC Nichada i.e., MFC Nichada and Golden Ventures go up and down completely randomly.

Pair Corralation between MFC Nichada and Golden Ventures

Assuming the 90 days trading horizon MFC Nichada Thani Property is expected to generate 1.96 times more return on investment than Golden Ventures. However, MFC Nichada is 1.96 times more volatile than Golden Ventures Leasehold. It trades about 0.05 of its potential returns per unit of risk. Golden Ventures Leasehold is currently generating about 0.02 per unit of risk. If you would invest  224.00  in MFC Nichada Thani Property on September 28, 2024 and sell it today you would earn a total of  14.00  from holding MFC Nichada Thani Property or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

MFC Nichada Thani Property  vs.  Golden Ventures Leasehold

MFC Nichada Thani

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MFC Nichada Thani Property are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, MFC Nichada may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Golden Ventures Leasehold

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Ventures Leasehold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Golden Ventures is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MFC Nichada and Golden Ventures

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

The idea behind MFC Nichada Thani Property and Golden Ventures Leasehold 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.