Correlation Between MCBC Holdings and Sturm Ruger
Can any of the company-specific risk be diversified away by investing in both MCBC Holdings and Sturm Ruger 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 Sturm Ruger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCBC Holdings and Sturm Ruger, you can compare the effects of market volatilities on MCBC Holdings and Sturm Ruger 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 Sturm Ruger. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCBC Holdings and Sturm Ruger.
Diversification Opportunities for MCBC Holdings and Sturm Ruger
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MCBC and Sturm is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding MCBC Holdings and Sturm Ruger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sturm Ruger 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 Sturm Ruger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sturm Ruger has no effect on the direction of MCBC Holdings i.e., MCBC Holdings and Sturm Ruger go up and down completely randomly.
Pair Corralation between MCBC Holdings and Sturm Ruger
Given the investment horizon of 90 days MCBC Holdings is expected to generate 1.67 times more return on investment than Sturm Ruger. However, MCBC Holdings is 1.67 times more volatile than Sturm Ruger. It trades about 0.0 of its potential returns per unit of risk. Sturm Ruger is currently generating about -0.04 per unit of risk. If you would invest 2,616 in MCBC Holdings on August 27, 2024 and sell it today you would lose (481.00) from holding MCBC Holdings or give up 18.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCBC Holdings vs. Sturm Ruger
Performance |
| Timeline |
| MCBC Holdings |
| Sturm Ruger |
MCBC Holdings and Sturm Ruger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCBC Holdings and Sturm Ruger
The main advantage of trading using opposite MCBC Holdings and Sturm Ruger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCBC Holdings position performs unexpectedly, Sturm Ruger 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 Sturm Ruger will offset losses from the drop in Sturm Ruger's long position.| MCBC Holdings vs. Malibu Boats | MCBC Holdings vs. Onewater Marine | MCBC Holdings vs. Heidrick Struggles International | MCBC Holdings vs. Johnson Outdoors |
| Sturm Ruger vs. MCBC Holdings | Sturm Ruger vs. Winnebago Industries | Sturm Ruger vs. LCI Industries | Sturm Ruger vs. Thor Industries |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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