Correlation Between G8 Education and Mayfield Childcare
Can any of the company-specific risk be diversified away by investing in both G8 Education 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 G8 Education and Mayfield Childcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G8 Education and Mayfield Childcare, you can compare the effects of market volatilities on G8 Education 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 G8 Education with a short position of Mayfield Childcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 Education and Mayfield Childcare.
Diversification Opportunities for G8 Education and Mayfield Childcare
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GEM and Mayfield is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding G8 Education and Mayfield Childcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfield Childcare and G8 Education 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 G8 Education 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 G8 Education i.e., G8 Education and Mayfield Childcare go up and down completely randomly.
Pair Corralation between G8 Education and Mayfield Childcare
Assuming the 90 days trading horizon G8 Education is expected to generate 0.28 times more return on investment than Mayfield Childcare. However, G8 Education is 3.51 times less risky than Mayfield Childcare. It trades about 0.01 of its potential returns per unit of risk. Mayfield Childcare is currently generating about -0.05 per unit of risk. If you would invest 134.00 in G8 Education on October 22, 2024 and sell it today you would earn a total of 0.00 from holding G8 Education or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G8 Education vs. Mayfield Childcare
Performance |
| Timeline |
| G8 Education |
| Mayfield Childcare |
G8 Education and Mayfield Childcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G8 Education and Mayfield Childcare
The main advantage of trading using opposite G8 Education and Mayfield Childcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 Education 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.| G8 Education vs. DY6 Metals | G8 Education vs. Sports Entertainment Group | G8 Education vs. Centaurus Metals | G8 Education vs. Dexus Convenience Retail |
| Mayfield Childcare vs. Bank of Queensland | Mayfield Childcare vs. Perpetual Credit Income | Mayfield Childcare vs. MotorCycle Holdings | Mayfield Childcare vs. Insurance Australia Group |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |