Correlation Between Cairn Homes and Marwyn Value
Can any of the company-specific risk be diversified away by investing in both Cairn Homes and Marwyn Value 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 Cairn Homes and Marwyn Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairn Homes PLC and Marwyn Value Investors, you can compare the effects of market volatilities on Cairn Homes and Marwyn Value 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 Cairn Homes with a short position of Marwyn Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairn Homes and Marwyn Value.
Diversification Opportunities for Cairn Homes and Marwyn Value
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cairn and Marwyn is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC and Marwyn Value Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marwyn Value Investors and Cairn Homes 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 Cairn Homes PLC are associated (or correlated) with Marwyn Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marwyn Value Investors has no effect on the direction of Cairn Homes i.e., Cairn Homes and Marwyn Value go up and down completely randomly.
Pair Corralation between Cairn Homes and Marwyn Value
Assuming the 90 days trading horizon Cairn Homes is expected to generate 8.72 times less return on investment than Marwyn Value. In addition to that, Cairn Homes is 1.71 times more volatile than Marwyn Value Investors. It trades about 0.01 of its total potential returns per unit of risk. Marwyn Value Investors is currently generating about 0.21 per unit of volatility. If you would invest 8,848 in Marwyn Value Investors on October 24, 2024 and sell it today you would earn a total of 1,152 from holding Marwyn Value Investors or generate 13.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairn Homes PLC vs. Marwyn Value Investors
Performance |
| Timeline |
| Cairn Homes PLC |
| Marwyn Value Investors |
Cairn Homes and Marwyn Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairn Homes and Marwyn Value
The main advantage of trading using opposite Cairn Homes and Marwyn Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairn Homes position performs unexpectedly, Marwyn Value 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 Marwyn Value will offset losses from the drop in Marwyn Value's long position.| Cairn Homes vs. Fidelity National Information | Cairn Homes vs. Baker Steel Resources | Cairn Homes vs. Extra Space Storage | Cairn Homes vs. Bankers Investment Trust |
| Marwyn Value vs. Cairn Homes PLC | Marwyn Value vs. Golden Metal Resources | Marwyn Value vs. JB Hunt Transport | Marwyn Value vs. Alien Metals |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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