Correlation Between Mccoy Global and Maxim Power
Can any of the company-specific risk be diversified away by investing in both Mccoy Global and Maxim Power 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 Mccoy Global and Maxim Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mccoy Global and Maxim Power Corp, you can compare the effects of market volatilities on Mccoy Global and Maxim Power 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 Mccoy Global with a short position of Maxim Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mccoy Global and Maxim Power.
Diversification Opportunities for Mccoy Global and Maxim Power
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mccoy and Maxim is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Mccoy Global and Maxim Power Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxim Power Corp and Mccoy Global 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 Mccoy Global are associated (or correlated) with Maxim Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxim Power Corp has no effect on the direction of Mccoy Global i.e., Mccoy Global and Maxim Power go up and down completely randomly.
Pair Corralation between Mccoy Global and Maxim Power
Assuming the 90 days trading horizon Mccoy Global is expected to under-perform the Maxim Power. In addition to that, Mccoy Global is 1.1 times more volatile than Maxim Power Corp. It trades about -0.2 of its total potential returns per unit of risk. Maxim Power Corp is currently generating about 0.31 per unit of volatility. If you would invest 379.00 in Maxim Power Corp on August 28, 2024 and sell it today you would earn a total of 106.00 from holding Maxim Power Corp or generate 27.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mccoy Global vs. Maxim Power Corp
Performance |
| Timeline |
| Mccoy Global |
| Maxim Power Corp |
Mccoy Global and Maxim Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mccoy Global and Maxim Power
The main advantage of trading using opposite Mccoy Global and Maxim Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mccoy Global position performs unexpectedly, Maxim Power 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 Maxim Power will offset losses from the drop in Maxim Power's long position.| Mccoy Global vs. Bri Chem Corp | Mccoy Global vs. High Arctic Energy | Mccoy Global vs. PHX Energy Services |
| Maxim Power vs. Caldwell Partners International | Maxim Power vs. Chesswood Group Limited | Maxim Power vs. Mccoy Global | Maxim Power vs. Pulse Seismic |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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