Correlation Between MCB GROUP and MUA

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

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

Diversification Opportunities for MCB GROUP and MUA

0.59

Correlation Coefficient

MCB GROUP  MUA

Very weak diversification

The 3 months correlation between MCB and MUA is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding MCB GROUP LIMITED and MUA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUA LTD and MCB GROUP 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 MCB GROUP LIMITED are associated (or correlated) with MUA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUA LTD has no effect on the direction of MCB GROUP i.e., MCB GROUP and MUA go up and down completely randomly.

Pair Corralation between MCB GROUP and MUA

Assuming the 90 days trading horizon MCB GROUP LIMITED is expected to under-perform the MUA. But the stock apears to be less risky and, when comparing its historical volatility, MCB GROUP LIMITED is 4.22 times less risky than MUA. The stock trades about -0.05 of its potential returns per unit of risk. The MUA LTD is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6,200  in MUA LTD on April 22, 2025 and sell it today you would earn a total of  300.00  from holding MUA LTD or generate 4.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

MCB GROUP LIMITED  vs.  MUA LTD

MCB GROUP LIMITED

Risk-Adjusted Performance

Very Weak

Over the last 90 days MCB GROUP LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

MUA LTD

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MUA LTD are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, MUA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with MCB GROUP and MUA

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

The idea behind MCB GROUP LIMITED and MUA LTD 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..