Correlation Between Macmahon Holdings and Almonty Industries
Can any of the company-specific risk be diversified away by investing in both Macmahon Holdings and Almonty Industries 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 Macmahon Holdings and Almonty Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macmahon Holdings Limited and Almonty Industries, you can compare the effects of market volatilities on Macmahon Holdings and Almonty Industries 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 Macmahon Holdings with a short position of Almonty Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macmahon Holdings and Almonty Industries.
Diversification Opportunities for Macmahon Holdings and Almonty Industries
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Macmahon and Almonty is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Macmahon Holdings Limited and Almonty Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almonty Industries and Macmahon 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 Macmahon Holdings Limited are associated (or correlated) with Almonty Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almonty Industries has no effect on the direction of Macmahon Holdings i.e., Macmahon Holdings and Almonty Industries go up and down completely randomly.
Pair Corralation between Macmahon Holdings and Almonty Industries
Assuming the 90 days horizon Macmahon Holdings Limited is expected to generate 0.98 times more return on investment than Almonty Industries. However, Macmahon Holdings Limited is 1.03 times less risky than Almonty Industries. It trades about 0.14 of its potential returns per unit of risk. Almonty Industries is currently generating about 0.06 per unit of risk. If you would invest 9.19 in Macmahon Holdings Limited on September 12, 2024 and sell it today you would earn a total of 15.81 from holding Macmahon Holdings Limited or generate 172.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 64.24% |
| Values | Daily Returns |
Macmahon Holdings Limited vs. Almonty Industries
Performance |
| Timeline |
| Macmahon Holdings |
| Almonty Industries |
Macmahon Holdings and Almonty Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macmahon Holdings and Almonty Industries
The main advantage of trading using opposite Macmahon Holdings and Almonty Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macmahon Holdings position performs unexpectedly, Almonty Industries 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 Almonty Industries will offset losses from the drop in Almonty Industries' long position.| Macmahon Holdings vs. Advantage Solutions | Macmahon Holdings vs. Atlas Corp | Macmahon Holdings vs. PureCycle Technologies | Macmahon Holdings vs. WM Technology |
| Almonty Industries vs. Advantage Solutions | Almonty Industries vs. Atlas Corp | Almonty Industries vs. PureCycle Technologies | Almonty Industries vs. WM Technology |
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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