Correlation Between Globex Mining and Macmahon Holdings
Can any of the company-specific risk be diversified away by investing in both Globex Mining 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 Globex Mining and Macmahon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and Macmahon Holdings Limited, you can compare the effects of market volatilities on Globex Mining 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 Globex Mining with a short position of Macmahon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Macmahon Holdings.
Diversification Opportunities for Globex Mining and Macmahon Holdings
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Globex and Macmahon is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Macmahon Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macmahon Holdings and Globex Mining 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 Globex Mining Enterprises 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 Globex Mining i.e., Globex Mining and Macmahon Holdings go up and down completely randomly.
Pair Corralation between Globex Mining and Macmahon Holdings
Assuming the 90 days horizon Globex Mining is expected to generate 4.73 times less return on investment than Macmahon Holdings. But when comparing it to its historical volatility, Globex Mining Enterprises is 2.17 times less risky than Macmahon Holdings. It trades about 0.06 of its potential returns per unit of risk. Macmahon Holdings Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 8.79 in Macmahon Holdings Limited on December 4, 2024 and sell it today you would earn a total of 11.21 from holding Macmahon Holdings Limited or generate 127.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 28.19% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Macmahon Holdings Limited
Performance |
| Timeline |
| Globex Mining Enterprises |
| Macmahon Holdings |
Globex Mining and Macmahon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Macmahon Holdings
The main advantage of trading using opposite Globex Mining and Macmahon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining 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.| Globex Mining vs. Atomic Minerals | Globex Mining vs. Mundoro Capital | Globex Mining vs. E79 Resources Corp | Globex Mining vs. Norra Metals Corp |
| Macmahon Holdings vs. National CineMedia | Macmahon Holdings vs. Sphere Entertainment Co | Macmahon Holdings vs. ZW Data Action | Macmahon Holdings vs. Deluxe |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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