Correlation Between SUN and MCB GROUP

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

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

Diversification Opportunities for SUN and MCB GROUP

0.12

Correlation Coefficient

SUN  MCB GROUP

Average diversification

The 3 months correlation between SUN and MCB is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SUN LIMITED 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 SUN 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 SUN LIMITED 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 SUN i.e., SUN and MCB GROUP go up and down completely randomly.

Pair Corralation between SUN and MCB GROUP

Assuming the 90 days trading horizon SUN LIMITED is expected to generate 3.41 times more return on investment than MCB GROUP. However, SUN is 3.41 times more volatile than MCB GROUP LIMITED. It trades about 0.05 of its potential returns per unit of risk. MCB GROUP LIMITED is currently generating about -0.05 per unit of risk. If you would invest  3,545  in SUN LIMITED on April 22, 2025 and sell it today you would earn a total of  255.00  from holding SUN LIMITED or generate 7.19% return on investment over 90 days.

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

SUN LIMITED  vs.  MCB GROUP LIMITED

SUN LIMITED

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SUN LIMITED are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, SUN may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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.

Pair Trading with SUN and MCB GROUP

The main advantage of trading using opposite SUN and MCB GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN 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 SUN LIMITED 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..