Correlation Between MCF Energy and Naturally Splendid

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

By analyzing existing cross correlation between MCF Energy and Naturally Splendid Enterprises, you can compare the effects of market volatilities on MCF Energy and Naturally Splendid 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 MCF Energy with a short position of Naturally Splendid. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCF Energy and Naturally Splendid.

Diversification Opportunities for MCF Energy and Naturally Splendid

0.0

Correlation Coefficient

MCF Energy  Naturally Splendid

Pay attention - limited upside

The 3 months correlation between MCF and Naturally is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MCF Energy and Naturally Splendid Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturally Splendid and MCF Energy 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 MCF Energy are associated (or correlated) with Naturally Splendid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturally Splendid has no effect on the direction of MCF Energy i.e., MCF Energy and Naturally Splendid go up and down completely randomly.

Pair Corralation between MCF Energy and Naturally Splendid

If you would invest  3.85  in MCF Energy on May 21, 2025 and sell it today you would lose (0.06) from holding MCF Energy or give up 1.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	67.21%
Values	Daily Returns

MCF Energy  vs.  Naturally Splendid Enterprises

MCF Energy

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in MCF Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, MCF Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Naturally Splendid

Risk-Adjusted Performance

Weakest

Over the last 90 days Naturally Splendid Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Naturally Splendid is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MCF Energy and Naturally Splendid

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

The idea behind MCF Energy and Naturally Splendid Enterprises 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.