Correlation Between WW Grainger and Mindflair Plc
Can any of the company-specific risk be diversified away by investing in both WW Grainger and Mindflair Plc 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 WW Grainger and Mindflair Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WW Grainger and Mindflair Plc, you can compare the effects of market volatilities on WW Grainger and Mindflair Plc 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 WW Grainger with a short position of Mindflair Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of WW Grainger and Mindflair Plc.
Diversification Opportunities for WW Grainger and Mindflair Plc
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0IZI and Mindflair is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding WW Grainger and Mindflair Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindflair Plc and WW Grainger 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 WW Grainger are associated (or correlated) with Mindflair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindflair Plc has no effect on the direction of WW Grainger i.e., WW Grainger and Mindflair Plc go up and down completely randomly.
Pair Corralation between WW Grainger and Mindflair Plc
Assuming the 90 days trading horizon WW Grainger is expected to generate 1.27 times more return on investment than Mindflair Plc. However, WW Grainger is 1.27 times more volatile than Mindflair Plc. It trades about 0.04 of its potential returns per unit of risk. Mindflair Plc is currently generating about -0.01 per unit of risk. If you would invest 56,411 in WW Grainger on October 7, 2024 and sell it today you would earn a total of 48,888 from holding WW Grainger or generate 86.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.79% |
| Values | Daily Returns |
WW Grainger vs. Mindflair Plc
Performance |
| Timeline |
| WW Grainger |
| Mindflair Plc |
WW Grainger and Mindflair Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WW Grainger and Mindflair Plc
The main advantage of trading using opposite WW Grainger and Mindflair Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WW Grainger position performs unexpectedly, Mindflair Plc 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 Mindflair Plc will offset losses from the drop in Mindflair Plc's long position.| WW Grainger vs. Chrysalis Investments | WW Grainger vs. New Residential Investment | WW Grainger vs. Vietnam Enterprise Investments | WW Grainger vs. St Galler Kantonalbank |
| Mindflair Plc vs. BH Macro Limited | Mindflair Plc vs. Fair Oaks Income | Mindflair Plc vs. Intermediate Capital Group | Mindflair Plc vs. FC Investment Trust |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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