Correlation Between Macmahon Holdings and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Macmahon Holdings and Aurelia Metals 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 Aurelia Metals 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 Aurelia Metals Limited, you can compare the effects of market volatilities on Macmahon Holdings and Aurelia Metals 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 Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macmahon Holdings and Aurelia Metals.
Diversification Opportunities for Macmahon Holdings and Aurelia Metals
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Macmahon and Aurelia is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Macmahon Holdings Limited and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals 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 Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Macmahon Holdings i.e., Macmahon Holdings and Aurelia Metals go up and down completely randomly.
Pair Corralation between Macmahon Holdings and Aurelia Metals
If you would invest 15.00 in Aurelia Metals Limited on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Aurelia Metals Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Macmahon Holdings Limited vs. Aurelia Metals Limited
Performance |
| Timeline |
| Macmahon Holdings |
| Aurelia Metals |
Macmahon Holdings and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macmahon Holdings and Aurelia Metals
The main advantage of trading using opposite Macmahon Holdings and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macmahon Holdings position performs unexpectedly, Aurelia Metals 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 Aurelia Metals will offset losses from the drop in Aurelia Metals' long position.| Macmahon Holdings vs. South32 Limited | Macmahon Holdings vs. NioCorp Developments Ltd | Macmahon Holdings vs. HUMANA INC | Macmahon Holdings vs. SCOR PK |
| Aurelia Metals vs. Champion Bear Resources | Aurelia Metals vs. Baroyeca Gold Silver | Aurelia Metals vs. Centaurus Metals Limited | Aurelia Metals vs. Edison Cobalt Corp |
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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