Correlation Between Maggie Beer and Rand Mining
Can any of the company-specific risk be diversified away by investing in both Maggie Beer and Rand Mining 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 Rand Mining 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 Rand Mining, you can compare the effects of market volatilities on Maggie Beer and Rand Mining 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 Rand Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maggie Beer and Rand Mining.
Diversification Opportunities for Maggie Beer and Rand Mining
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Maggie and Rand is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Maggie Beer Holdings and Rand Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rand Mining 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 Rand Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rand Mining has no effect on the direction of Maggie Beer i.e., Maggie Beer and Rand Mining go up and down completely randomly.
Pair Corralation between Maggie Beer and Rand Mining
Assuming the 90 days trading horizon Maggie Beer Holdings is expected to generate 0.6 times more return on investment than Rand Mining. However, Maggie Beer Holdings is 1.68 times less risky than Rand Mining. It trades about 0.24 of its potential returns per unit of risk. Rand Mining is currently generating about -0.1 per unit of risk. If you would invest 5.30 in Maggie Beer Holdings on October 13, 2024 and sell it today you would earn a total of 0.50 from holding Maggie Beer Holdings or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Maggie Beer Holdings vs. Rand Mining
Performance |
| Timeline |
| Maggie Beer Holdings |
| Rand Mining |
Maggie Beer and Rand Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maggie Beer and Rand Mining
The main advantage of trading using opposite Maggie Beer and Rand Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maggie Beer position performs unexpectedly, Rand Mining 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 Rand Mining will offset losses from the drop in Rand Mining's long position.| Maggie Beer vs. Hutchison Telecommunications | Maggie Beer vs. MFF Capital Investments | Maggie Beer vs. Microequities Asset Management | Maggie Beer vs. Clime Investment Management |
| Rand Mining vs. Tombador Iron | Rand Mining vs. Mount Gibson Iron | Rand Mining vs. Lendlease Group | Rand Mining vs. Alternative Investment Trust |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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