Correlation Between Maggie Beer and Vulcan Steel
Can any of the company-specific risk be diversified away by investing in both Maggie Beer and Vulcan Steel 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 Vulcan Steel 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 Vulcan Steel, you can compare the effects of market volatilities on Maggie Beer and Vulcan Steel 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 Vulcan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maggie Beer and Vulcan Steel.
Diversification Opportunities for Maggie Beer and Vulcan Steel
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Maggie and Vulcan is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Maggie Beer Holdings and Vulcan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Steel 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 Vulcan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Steel has no effect on the direction of Maggie Beer i.e., Maggie Beer and Vulcan Steel go up and down completely randomly.
Pair Corralation between Maggie Beer and Vulcan Steel
Assuming the 90 days trading horizon Maggie Beer Holdings is expected to generate 0.96 times more return on investment than Vulcan Steel. However, Maggie Beer Holdings is 1.05 times less risky than Vulcan Steel. It trades about 0.02 of its potential returns per unit of risk. Vulcan Steel is currently generating about -0.02 per unit of risk. If you would invest 5.50 in Maggie Beer Holdings on October 30, 2024 and sell it today you would earn a total of 0.00 from holding Maggie Beer Holdings or generate 0.0% 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. Vulcan Steel
Performance |
| Timeline |
| Maggie Beer Holdings |
| Vulcan Steel |
Maggie Beer and Vulcan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maggie Beer and Vulcan Steel
The main advantage of trading using opposite Maggie Beer and Vulcan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maggie Beer position performs unexpectedly, Vulcan Steel 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 Vulcan Steel will offset losses from the drop in Vulcan Steel's long position.| Maggie Beer vs. National Storage REIT | Maggie Beer vs. Kkr Credit Income | Maggie Beer vs. Hudson Investment Group | Maggie Beer vs. Bell Financial Group |
| Vulcan Steel vs. Sonic Healthcare | Vulcan Steel vs. Fisher Paykel Healthcare | Vulcan Steel vs. EROAD | Vulcan Steel vs. Austco Healthcare |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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