Correlation Between Maggie Beer and Step One
Can any of the company-specific risk be diversified away by investing in both Maggie Beer and Step One 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 Step One 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 Step One Clothing, you can compare the effects of market volatilities on Maggie Beer and Step One 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 Step One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maggie Beer and Step One.
Diversification Opportunities for Maggie Beer and Step One
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Maggie and Step is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Maggie Beer Holdings and Step One Clothing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Step One Clothing 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 Step One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Step One Clothing has no effect on the direction of Maggie Beer i.e., Maggie Beer and Step One go up and down completely randomly.
Pair Corralation between Maggie Beer and Step One
Assuming the 90 days trading horizon Maggie Beer Holdings is expected to generate 1.31 times more return on investment than Step One. However, Maggie Beer is 1.31 times more volatile than Step One Clothing. It trades about 0.04 of its potential returns per unit of risk. Step One Clothing is currently generating about 0.03 per unit of risk. If you would invest 5.40 in Maggie Beer Holdings on October 28, 2024 and sell it today you would earn a total of 0.10 from holding Maggie Beer Holdings or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maggie Beer Holdings vs. Step One Clothing
Performance |
| Timeline |
| Maggie Beer Holdings |
| Step One Clothing |
Maggie Beer and Step One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maggie Beer and Step One
The main advantage of trading using opposite Maggie Beer and Step One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maggie Beer position performs unexpectedly, Step One 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 Step One will offset losses from the drop in Step One's long position.| Maggie Beer vs. Vitura Health Limited | Maggie Beer vs. Apiam Animal Health | Maggie Beer vs. Epsilon Healthcare | Maggie Beer vs. ACDC Metals |
| Step One vs. Stelar Metals | Step One vs. Lykos Metals | Step One vs. Champion Iron | Step One vs. Sky Metals |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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