Correlation Between Maanshan Iron and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both Maanshan Iron and Maiden 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 Maanshan Iron and Maiden Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maanshan Iron Steel and Maiden Holdings, you can compare the effects of market volatilities on Maanshan Iron and Maiden 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 Maanshan Iron with a short position of Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and Maiden Holdings.
Diversification Opportunities for Maanshan Iron and Maiden Holdings
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maanshan and Maiden is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings and Maanshan Iron 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 Maanshan Iron Steel are associated (or correlated) with Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of Maanshan Iron i.e., Maanshan Iron and Maiden Holdings go up and down completely randomly.
Pair Corralation between Maanshan Iron and Maiden Holdings
If you would invest 1,670 in Maiden Holdings on August 24, 2024 and sell it today you would earn a total of 23.00 from holding Maiden Holdings or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Maanshan Iron Steel vs. Maiden Holdings
Performance |
| Timeline |
| Maanshan Iron Steel |
| Maiden Holdings |
Maanshan Iron and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maanshan Iron and Maiden Holdings
The main advantage of trading using opposite Maanshan Iron and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron position performs unexpectedly, Maiden 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.| Maanshan Iron vs. ArcelorMittal SA ADR | Maanshan Iron vs. Gerdau SA ADR | Maanshan Iron vs. POSCO Holdings |
| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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