Correlation Between Mamas Creations and SkyCity Entertainment
Can any of the company-specific risk be diversified away by investing in both Mamas Creations and SkyCity Entertainment 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 Mamas Creations and SkyCity Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mamas Creations and SkyCity Entertainment Group, you can compare the effects of market volatilities on Mamas Creations and SkyCity Entertainment 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 Mamas Creations with a short position of SkyCity Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mamas Creations and SkyCity Entertainment.
Diversification Opportunities for Mamas Creations and SkyCity Entertainment
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mamas and SkyCity is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mamas Creations and SkyCity Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SkyCity Entertainment and Mamas Creations 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 Mamas Creations are associated (or correlated) with SkyCity Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SkyCity Entertainment has no effect on the direction of Mamas Creations i.e., Mamas Creations and SkyCity Entertainment go up and down completely randomly.
Pair Corralation between Mamas Creations and SkyCity Entertainment
Given the investment horizon of 90 days Mamas Creations is expected to generate 1.16 times more return on investment than SkyCity Entertainment. However, Mamas Creations is 1.16 times more volatile than SkyCity Entertainment Group. It trades about 0.03 of its potential returns per unit of risk. SkyCity Entertainment Group is currently generating about -0.12 per unit of risk. If you would invest 735.00 in Mamas Creations on October 22, 2024 and sell it today you would earn a total of 45.00 from holding Mamas Creations or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mamas Creations vs. SkyCity Entertainment Group
Performance |
| Timeline |
| Mamas Creations |
| SkyCity Entertainment |
Mamas Creations and SkyCity Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mamas Creations and SkyCity Entertainment
The main advantage of trading using opposite Mamas Creations and SkyCity Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mamas Creations position performs unexpectedly, SkyCity Entertainment 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 SkyCity Entertainment will offset losses from the drop in SkyCity Entertainment's long position.| Mamas Creations vs. National Beverage Corp | Mamas Creations vs. Compania Cervecerias Unidas | Mamas Creations vs. High Performance Beverages | Mamas Creations vs. PepsiCo |
| SkyCity Entertainment vs. Nagacorp | SkyCity Entertainment vs. Wynn Macau | SkyCity Entertainment vs. MGM China Holdings | SkyCity Entertainment vs. Table Trac |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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