Correlation Between MCI Management and MBank SA

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

By analyzing existing cross correlation between MCI Management SA and mBank SA, you can compare the effects of market volatilities on MCI Management and MBank SA 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 MCI Management with a short position of MBank SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCI Management and MBank SA.

Diversification Opportunities for MCI Management and MBank SA

-0.2

Correlation Coefficient

MCI Management  MBank SA

Good diversification

The 3 months correlation between MCI and MBank is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding MCI Management SA and mBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mBank SA and MCI Management 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 MCI Management SA are associated (or correlated) with MBank SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mBank SA has no effect on the direction of MCI Management i.e., MCI Management and MBank SA go up and down completely randomly.

Pair Corralation between MCI Management and MBank SA

Assuming the 90 days trading horizon MCI Management SA is expected to generate 0.71 times more return on investment than MBank SA. However, MCI Management SA is 1.41 times less risky than MBank SA. It trades about 0.19 of its potential returns per unit of risk. mBank SA is currently generating about -0.02 per unit of risk. If you would invest  2,440  in MCI Management SA on April 24, 2025 and sell it today you would earn a total of  450.00  from holding MCI Management SA or generate 18.44% return on investment over 90 days.

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

MCI Management SA  vs.  mBank SA

MCI Management SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MCI Management SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, MCI Management reported solid returns over the last few months and may actually be approaching a breakup point.

mBank SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days mBank SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, MBank SA is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with MCI Management and MBank SA

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

The idea behind MCI Management SA and mBank SA 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.