Correlation Between British Amer and Mayfield Childcare
Can any of the company-specific risk be diversified away by investing in both British Amer and Mayfield Childcare 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 British Amer and Mayfield Childcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bailador Technology Invest and Mayfield Childcare, you can compare the effects of market volatilities on British Amer and Mayfield Childcare 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 British Amer with a short position of Mayfield Childcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Mayfield Childcare.
Diversification Opportunities for British Amer and Mayfield Childcare
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between British and Mayfield is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Mayfield Childcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfield Childcare and British Amer 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 Bailador Technology Invest are associated (or correlated) with Mayfield Childcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfield Childcare has no effect on the direction of British Amer i.e., British Amer and Mayfield Childcare go up and down completely randomly.
Pair Corralation between British Amer and Mayfield Childcare
Assuming the 90 days trading horizon British Amer is expected to generate 2.43 times less return on investment than Mayfield Childcare. But when comparing it to its historical volatility, Bailador Technology Invest is 1.8 times less risky than Mayfield Childcare. It trades about 0.05 of its potential returns per unit of risk. Mayfield Childcare is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 53.00 in Mayfield Childcare on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Mayfield Childcare or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. Mayfield Childcare
Performance |
| Timeline |
| Bailador Technology |
| Mayfield Childcare |
British Amer and Mayfield Childcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Mayfield Childcare
The main advantage of trading using opposite British Amer and Mayfield Childcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Mayfield Childcare 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 Mayfield Childcare will offset losses from the drop in Mayfield Childcare's long position.| British Amer vs. WA1 Resources | British Amer vs. Predictive Discovery | British Amer vs. Cooper Metals | British Amer vs. OD6 Metals |
| Mayfield Childcare vs. Iron Road | Mayfield Childcare vs. Homeco Daily Needs | Mayfield Childcare vs. Premier Investments | Mayfield Childcare vs. Flagship Investments |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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