Correlation Between Maggie Beer and Viva Leisure

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Can any of the company-specific risk be diversified away by investing in both Maggie Beer and Viva Leisure 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 Viva Leisure 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 Viva Leisure, you can compare the effects of market volatilities on Maggie Beer and Viva Leisure 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 Viva Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maggie Beer and Viva Leisure.

Diversification Opportunities for Maggie Beer and Viva Leisure

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Maggie and Viva is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Maggie Beer Holdings and Viva Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Leisure 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 Viva Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Leisure has no effect on the direction of Maggie Beer i.e., Maggie Beer and Viva Leisure go up and down completely randomly.

Pair Corralation between Maggie Beer and Viva Leisure

Assuming the 90 days trading horizon Maggie Beer Holdings is expected to generate 2.15 times more return on investment than Viva Leisure. However, Maggie Beer is 2.15 times more volatile than Viva Leisure. It trades about 0.08 of its potential returns per unit of risk. Viva Leisure is currently generating about -0.01 per unit of risk. If you would invest  5.00  in Maggie Beer Holdings on October 18, 2024 and sell it today you would earn a total of  1.30  from holding Maggie Beer Holdings or generate 26.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Maggie Beer Holdings  vs.  Viva Leisure

 Performance 
       Timeline  
Maggie Beer Holdings 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Maggie Beer Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Viva Leisure 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days Viva Leisure has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Viva Leisure is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Maggie Beer and Viva Leisure Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Maggie Beer and Viva Leisure

The main advantage of trading using opposite Maggie Beer and Viva Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maggie Beer position performs unexpectedly, Viva Leisure 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 Viva Leisure will offset losses from the drop in Viva Leisure's long position.
The idea behind Maggie Beer Holdings and Viva Leisure pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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