Correlation Between Arm Holdings and Mapletree Industrial
Can any of the company-specific risk be diversified away by investing in both Arm Holdings and Mapletree Industrial 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 Arm Holdings and Mapletree Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arm Holdings plc and Mapletree Industrial Trust, you can compare the effects of market volatilities on Arm Holdings and Mapletree Industrial 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 Arm Holdings with a short position of Mapletree Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arm Holdings and Mapletree Industrial.
Diversification Opportunities for Arm Holdings and Mapletree Industrial
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arm and Mapletree is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Arm Holdings plc and Mapletree Industrial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapletree Industrial and Arm Holdings 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 Arm Holdings plc are associated (or correlated) with Mapletree Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapletree Industrial has no effect on the direction of Arm Holdings i.e., Arm Holdings and Mapletree Industrial go up and down completely randomly.
Pair Corralation between Arm Holdings and Mapletree Industrial
Considering the 90-day investment horizon Arm Holdings plc is expected to generate 3.52 times more return on investment than Mapletree Industrial. However, Arm Holdings is 3.52 times more volatile than Mapletree Industrial Trust. It trades about 0.09 of its potential returns per unit of risk. Mapletree Industrial Trust is currently generating about -0.04 per unit of risk. If you would invest 5,310 in Arm Holdings plc on September 1, 2024 and sell it today you would earn a total of 8,119 from holding Arm Holdings plc or generate 152.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 32.34% |
| Values | Daily Returns |
Arm Holdings plc vs. Mapletree Industrial Trust
Performance |
| Timeline |
| Arm Holdings plc |
| Mapletree Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Arm Holdings and Mapletree Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arm Holdings and Mapletree Industrial
The main advantage of trading using opposite Arm Holdings and Mapletree Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arm Holdings position performs unexpectedly, Mapletree Industrial 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 Mapletree Industrial will offset losses from the drop in Mapletree Industrial's long position.| Arm Holdings vs. ArcelorMittal SA ADR | Arm Holdings vs. Sanyo Special Steel | Arm Holdings vs. United States Steel | Arm Holdings vs. CECO Environmental Corp |
| Mapletree Industrial vs. Getty Images Holdings | Mapletree Industrial vs. Olympic Steel | Mapletree Industrial vs. Weibo Corp | Mapletree Industrial vs. Jeld Wen Holding |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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