Correlation Between MFUT and STKd 100

Can any of the company-specific risk be diversified away by investing in both MFUT and STKd 100 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 MFUT and STKd 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MFUT and STKd 100 percent, you can compare the effects of market volatilities on MFUT and STKd 100 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 MFUT with a short position of STKd 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFUT and STKd 100.

Diversification Opportunities for MFUT and STKd 100

0.84

Correlation Coefficient

MFUT  STKd 100

Very poor diversification

The 3 months correlation between MFUT and STKd is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding MFUT and STKd 100 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STKd 100 percent and MFUT 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 MFUT are associated (or correlated) with STKd 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STKd 100 percent has no effect on the direction of MFUT i.e., MFUT and STKd 100 go up and down completely randomly.

Pair Corralation between MFUT and STKd 100

Given the investment horizon of 90 days MFUT is expected to generate 56.17 times less return on investment than STKd 100. But when comparing it to its historical volatility, MFUT is 8.13 times less risky than STKd 100. It trades about 0.06 of its potential returns per unit of risk. STKd 100 percent is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  1,712  in STKd 100 percent on May 3, 2025 and sell it today you would earn a total of  2,741  from holding STKd 100 percent or generate 160.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

MFUT  vs.  STKd 100 percent

MFUT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MFUT are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MFUT is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

STKd 100 percent

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in STKd 100 percent are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, STKd 100 unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MFUT and STKd 100

The main advantage of trading using opposite MFUT and STKd 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFUT position performs unexpectedly, STKd 100 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 STKd 100 will offset losses from the drop in STKd 100's long position.

The idea behind MFUT and STKd 100 percent 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..