Correlation Between Mader Group and Wilhelmina
Can any of the company-specific risk be diversified away by investing in both Mader Group and Wilhelmina 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 Wilhelmina 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 Wilhelmina, you can compare the effects of market volatilities on Mader Group and Wilhelmina 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 Wilhelmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mader Group and Wilhelmina.
Diversification Opportunities for Mader Group and Wilhelmina
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mader and Wilhelmina is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Mader Group Limited and Wilhelmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilhelmina 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 Wilhelmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilhelmina has no effect on the direction of Mader Group i.e., Mader Group and Wilhelmina go up and down completely randomly.
Pair Corralation between Mader Group and Wilhelmina
Assuming the 90 days horizon Mader Group Limited is expected to generate 0.65 times more return on investment than Wilhelmina. However, Mader Group Limited is 1.54 times less risky than Wilhelmina. It trades about 0.04 of its potential returns per unit of risk. Wilhelmina is currently generating about 0.01 per unit of risk. If you would invest 249.00 in Mader Group Limited on October 21, 2024 and sell it today you would earn a total of 108.00 from holding Mader Group Limited or generate 43.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.18% |
| Values | Daily Returns |
Mader Group Limited vs. Wilhelmina
Performance |
| Timeline |
| Mader Group Limited |
| Wilhelmina |
Mader Group and Wilhelmina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mader Group and Wilhelmina
The main advantage of trading using opposite Mader Group and Wilhelmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mader Group position performs unexpectedly, Wilhelmina 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 Wilhelmina will offset losses from the drop in Wilhelmina's long position.| Mader Group vs. Mako Mining Corp | Mader Group vs. Corsair Gaming | Mader Group vs. Mayfair Gold Corp | Mader Group vs. Cebu Air ADR |
| Wilhelmina vs. Network 1 Technologies | Wilhelmina vs. Rentokil Initial PLC | Wilhelmina vs. Mader Group Limited | Wilhelmina vs. SPAR 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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