Correlation Between Din Capital and MST Investment

Can any of the company-specific risk be diversified away by investing in both Din Capital and MST Investment 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 Din Capital and MST Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Din Capital Investment and MST Investment JSC, you can compare the effects of market volatilities on Din Capital and MST Investment 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 Din Capital with a short position of MST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and MST Investment.

Diversification Opportunities for Din Capital and MST Investment

0.72

Correlation Coefficient

Din Capital  MST Investment

Poor diversification

The 3 months correlation between Din and MST is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and MST Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MST Investment JSC and Din Capital 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 Din Capital Investment are associated (or correlated) with MST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MST Investment JSC has no effect on the direction of Din Capital i.e., Din Capital and MST Investment go up and down completely randomly.

Pair Corralation between Din Capital and MST Investment

Assuming the 90 days trading horizon Din Capital is expected to generate 2386.0 times less return on investment than MST Investment. But when comparing it to its historical volatility, Din Capital Investment is 1.14 times less risky than MST Investment. It trades about 0.0 of its potential returns per unit of risk. MST Investment JSC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  530,000  in MST Investment JSC on September 29, 2024 and sell it today you would earn a total of  160,000  from holding MST Investment JSC or generate 30.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	89.06%
Values	Daily Returns

Din Capital Investment  vs.  MST Investment JSC

Din Capital Investment

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Din Capital Investment are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Din Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

MST Investment JSC

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MST Investment JSC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, MST Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Din Capital and MST Investment

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

The idea behind Din Capital Investment and MST Investment JSC 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.