Correlation Between FINCORP INVESTMENT and MCB GROUP

Can any of the company-specific risk be diversified away by investing in both FINCORP INVESTMENT and MCB GROUP 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 FINCORP INVESTMENT and MCB GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FINCORP INVESTMENT LTD and MCB GROUP LIMITED, you can compare the effects of market volatilities on FINCORP INVESTMENT and MCB GROUP 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 FINCORP INVESTMENT with a short position of MCB GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of FINCORP INVESTMENT and MCB GROUP.

Diversification Opportunities for FINCORP INVESTMENT and MCB GROUP

0.31

Correlation Coefficient

FINCORP INVESTMENT  MCB GROUP

Weak diversification

The 3 months correlation between FINCORP and MCB is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding FINCORP INVESTMENT LTD and MCB GROUP LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCB GROUP LIMITED and FINCORP INVESTMENT 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 FINCORP INVESTMENT LTD are associated (or correlated) with MCB GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCB GROUP LIMITED has no effect on the direction of FINCORP INVESTMENT i.e., FINCORP INVESTMENT and MCB GROUP go up and down completely randomly.

Pair Corralation between FINCORP INVESTMENT and MCB GROUP

Assuming the 90 days trading horizon FINCORP INVESTMENT LTD is expected to generate 2.1 times more return on investment than MCB GROUP. However, FINCORP INVESTMENT is 2.1 times more volatile than MCB GROUP LIMITED. It trades about 0.02 of its potential returns per unit of risk. MCB GROUP LIMITED is currently generating about 0.02 per unit of risk. If you would invest  1,895  in FINCORP INVESTMENT LTD on April 23, 2025 and sell it today you would earn a total of  30.00  from holding FINCORP INVESTMENT LTD or generate 1.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

FINCORP INVESTMENT LTD  vs.  MCB GROUP LIMITED

FINCORP INVESTMENT LTD

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FINCORP INVESTMENT LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, FINCORP INVESTMENT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

MCB GROUP LIMITED

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MCB GROUP LIMITED are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, MCB GROUP is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with FINCORP INVESTMENT and MCB GROUP

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

The idea behind FINCORP INVESTMENT LTD and MCB GROUP LIMITED 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.