Correlation Between Mader Group and Discount Print
Can any of the company-specific risk be diversified away by investing in both Mader Group and Discount Print 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 Mader Group and Discount Print into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mader Group Limited and Discount Print USA, you can compare the effects of market volatilities on Mader Group and Discount Print 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 Mader Group with a short position of Discount Print. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mader Group and Discount Print.
Diversification Opportunities for Mader Group and Discount Print
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mader and Discount is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mader Group Limited and Discount Print USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discount Print USA and Mader Group 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 Mader Group Limited are associated (or correlated) with Discount Print. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discount Print USA has no effect on the direction of Mader Group i.e., Mader Group and Discount Print go up and down completely randomly.
Pair Corralation between Mader Group and Discount Print
Assuming the 90 days horizon Mader Group is expected to generate 15.27 times less return on investment than Discount Print. But when comparing it to its historical volatility, Mader Group Limited is 9.88 times less risky than Discount Print. It trades about 0.04 of its potential returns per unit of risk. Discount Print USA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.40 in Discount Print USA on August 24, 2024 and sell it today you would lose (0.37) from holding Discount Print USA or give up 92.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mader Group Limited vs. Discount Print USA
Performance |
| Timeline |
| Mader Group Limited |
| Discount Print USA |
Mader Group and Discount Print Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mader Group and Discount Print
The main advantage of trading using opposite Mader Group and Discount Print positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mader Group position performs unexpectedly, Discount Print 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 Discount Print will offset losses from the drop in Discount Print's long position.| Mader Group vs. Cintas | Mader Group vs. Thomson Reuters Corp | Mader Group vs. Global Payments | Mader Group vs. RB Global |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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