Correlation Between Almonty Industries and Macmahon Holdings
Can any of the company-specific risk be diversified away by investing in both Almonty Industries and Macmahon Holdings 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 Almonty Industries and Macmahon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Almonty Industries and Macmahon Holdings Limited, you can compare the effects of market volatilities on Almonty Industries and Macmahon Holdings 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 Almonty Industries with a short position of Macmahon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Almonty Industries and Macmahon Holdings.
Diversification Opportunities for Almonty Industries and Macmahon Holdings
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Almonty and Macmahon is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Almonty Industries and Macmahon Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macmahon Holdings and Almonty Industries 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 Almonty Industries are associated (or correlated) with Macmahon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macmahon Holdings has no effect on the direction of Almonty Industries i.e., Almonty Industries and Macmahon Holdings go up and down completely randomly.
Pair Corralation between Almonty Industries and Macmahon Holdings
Assuming the 90 days horizon Almonty Industries is expected to generate 2.35 times less return on investment than Macmahon Holdings. In addition to that, Almonty Industries is 1.03 times more volatile than Macmahon Holdings Limited. It trades about 0.06 of its total potential returns per unit of risk. Macmahon Holdings Limited is currently generating about 0.14 per unit of volatility. If you would invest 9.19 in Macmahon Holdings Limited on September 12, 2024 and sell it today you would earn a total of 15.81 from holding Macmahon Holdings Limited or generate 172.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 64.24% |
| Values | Daily Returns |
Almonty Industries vs. Macmahon Holdings Limited
Performance |
| Timeline |
| Almonty Industries |
| Macmahon Holdings |
Almonty Industries and Macmahon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Almonty Industries and Macmahon Holdings
The main advantage of trading using opposite Almonty Industries and Macmahon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Almonty Industries position performs unexpectedly, Macmahon Holdings 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 Macmahon Holdings will offset losses from the drop in Macmahon Holdings' long position.| Almonty Industries vs. Advantage Solutions | Almonty Industries vs. Atlas Corp | Almonty Industries vs. PureCycle Technologies | Almonty Industries vs. WM Technology |
| Macmahon Holdings vs. Advantage Solutions | Macmahon Holdings vs. Atlas Corp | Macmahon Holdings vs. PureCycle Technologies | Macmahon Holdings vs. WM Technology |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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