Correlation Between MFC Nichada and Hydrogen Freehold

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

Diversification Opportunities for MFC Nichada and Hydrogen Freehold

0.07

Correlation Coefficient

MFC Nichada  Hydrogen Freehold

Significant diversification

The 3 months correlation between MFC and Hydrogen is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding MFC Nichada Thani Property and Hydrogen Freehold Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrogen Freehold 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 Hydrogen Freehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrogen Freehold has no effect on the direction of MFC Nichada i.e., MFC Nichada and Hydrogen Freehold go up and down completely randomly.

Pair Corralation between MFC Nichada and Hydrogen Freehold

Assuming the 90 days trading horizon MFC Nichada Thani Property is expected to generate 212.39 times more return on investment than Hydrogen Freehold. However, MFC Nichada is 212.39 times more volatile than Hydrogen Freehold Leasehold. It trades about 0.47 of its potential returns per unit of risk. Hydrogen Freehold Leasehold is currently generating about 0.03 per unit of risk. If you would invest  461.00  in MFC Nichada Thani Property on September 16, 2024 and sell it today you would lose (461.00) from holding MFC Nichada Thani Property or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	83.61%
Values	Daily Returns

MFC Nichada Thani Property  vs.  Hydrogen Freehold Leasehold

MFC Nichada Thani

Risk-Adjusted Performance

37 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MFC Nichada Thani Property are ranked lower than 37 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, MFC Nichada sustained solid returns over the last few months and may actually be approaching a breakup point.

Hydrogen Freehold

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with MFC Nichada and Hydrogen Freehold

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

The idea behind MFC Nichada Thani Property and Hydrogen Freehold 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.