Correlation Between MFC Strategic and K W

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

By analyzing existing cross correlation between MFC Strategic Storage and K W Metal, you can compare the effects of market volatilities on MFC Strategic and K W 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 Strategic with a short position of K W. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFC Strategic and K W.

Diversification Opportunities for MFC Strategic and K W

0.46

Correlation Coefficient

MFC Strategic  K W

Very weak diversification

The 3 months correlation between MFC and KWM is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MFC Strategic Storage and K W Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K W Metal and MFC Strategic 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 Strategic Storage are associated (or correlated) with K W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K W Metal has no effect on the direction of MFC Strategic i.e., MFC Strategic and K W go up and down completely randomly.

Pair Corralation between MFC Strategic and K W

Assuming the 90 days trading horizon MFC Strategic Storage is expected to generate 0.45 times more return on investment than K W. However, MFC Strategic Storage is 2.23 times less risky than K W. It trades about 0.0 of its potential returns per unit of risk. K W Metal is currently generating about -0.02 per unit of risk. If you would invest  720.00  in MFC Strategic Storage on April 24, 2025 and sell it today you would earn a total of  0.00  from holding MFC Strategic Storage or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.61%
Values	Daily Returns

MFC Strategic Storage  vs.  K W Metal

MFC Strategic Storage

Risk-Adjusted Performance

Very Weak

Over the last 90 days MFC Strategic Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MFC Strategic is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

K W Metal

Risk-Adjusted Performance

Very Weak

Over the last 90 days K W Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, K W is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MFC Strategic and K W

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

The idea behind MFC Strategic Storage and K W Metal 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..