Correlation Between Maggie Beer and Adriatic Metals
Can any of the company-specific risk be diversified away by investing in both Maggie Beer and Adriatic Metals 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 Maggie Beer and Adriatic Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maggie Beer Holdings and Adriatic Metals Plc, you can compare the effects of market volatilities on Maggie Beer and Adriatic Metals 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 Maggie Beer with a short position of Adriatic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maggie Beer and Adriatic Metals.
Diversification Opportunities for Maggie Beer and Adriatic Metals
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maggie and Adriatic is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Maggie Beer Holdings and Adriatic Metals Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriatic Metals Plc and Maggie Beer 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 Maggie Beer Holdings are associated (or correlated) with Adriatic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriatic Metals Plc has no effect on the direction of Maggie Beer i.e., Maggie Beer and Adriatic Metals go up and down completely randomly.
Pair Corralation between Maggie Beer and Adriatic Metals
Assuming the 90 days trading horizon Maggie Beer Holdings is expected to generate 2.09 times more return on investment than Adriatic Metals. However, Maggie Beer is 2.09 times more volatile than Adriatic Metals Plc. It trades about 0.05 of its potential returns per unit of risk. Adriatic Metals Plc is currently generating about -0.36 per unit of risk. If you would invest 5.70 in Maggie Beer Holdings on October 12, 2024 and sell it today you would earn a total of 0.10 from holding Maggie Beer Holdings or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maggie Beer Holdings vs. Adriatic Metals Plc
Performance |
| Timeline |
| Maggie Beer Holdings |
| Adriatic Metals Plc |
Maggie Beer and Adriatic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maggie Beer and Adriatic Metals
The main advantage of trading using opposite Maggie Beer and Adriatic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maggie Beer position performs unexpectedly, Adriatic Metals 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 Adriatic Metals will offset losses from the drop in Adriatic Metals' long position.| Maggie Beer vs. Medical Developments International | Maggie Beer vs. Mirrabooka Investments | Maggie Beer vs. Garda Diversified Ppty | Maggie Beer vs. Argo Investments |
| Adriatic Metals vs. Australian Unity Office | Adriatic Metals vs. Djerriwarrh Investments | Adriatic Metals vs. Maggie Beer Holdings | Adriatic Metals vs. Diversified United Investment |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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