Correlation Between MCBC Holdings and Ree Automotive
Can any of the company-specific risk be diversified away by investing in both MCBC Holdings and Ree Automotive 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 MCBC Holdings and Ree Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCBC Holdings and Ree Automotive Holding, you can compare the effects of market volatilities on MCBC Holdings and Ree Automotive 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 MCBC Holdings with a short position of Ree Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCBC Holdings and Ree Automotive.
Diversification Opportunities for MCBC Holdings and Ree Automotive
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MCBC and Ree is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding MCBC Holdings and Ree Automotive Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ree Automotive Holding and MCBC Holdings 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 MCBC Holdings are associated (or correlated) with Ree Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ree Automotive Holding has no effect on the direction of MCBC Holdings i.e., MCBC Holdings and Ree Automotive go up and down completely randomly.
Pair Corralation between MCBC Holdings and Ree Automotive
Given the investment horizon of 90 days MCBC Holdings is expected to generate 0.26 times more return on investment than Ree Automotive. However, MCBC Holdings is 3.91 times less risky than Ree Automotive. It trades about -0.38 of its potential returns per unit of risk. Ree Automotive Holding is currently generating about -0.33 per unit of risk. If you would invest 1,817 in MCBC Holdings on January 9, 2025 and sell it today you would lose (346.00) from holding MCBC Holdings or give up 19.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCBC Holdings vs. Ree Automotive Holding
Performance |
| Timeline |
| MCBC Holdings |
| Ree Automotive Holding |
MCBC Holdings and Ree Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCBC Holdings and Ree Automotive
The main advantage of trading using opposite MCBC Holdings and Ree Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCBC Holdings position performs unexpectedly, Ree Automotive 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 Ree Automotive will offset losses from the drop in Ree Automotive's long position.| MCBC Holdings vs. Malibu Boats | MCBC Holdings vs. Onewater Marine | MCBC Holdings vs. Heidrick Struggles International | MCBC Holdings vs. Johnson Outdoors |
| Ree Automotive vs. Twin Vee Powercats | Ree Automotive vs. LCI Industries | Ree Automotive vs. Curtiss Motorcycles | Ree Automotive vs. Marine Products |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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