Correlation Between Macmahon Holdings and Huntsman Exploration
Can any of the company-specific risk be diversified away by investing in both Macmahon Holdings and Huntsman Exploration 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 Huntsman Exploration 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 Huntsman Exploration, you can compare the effects of market volatilities on Macmahon Holdings and Huntsman Exploration 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 Huntsman Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macmahon Holdings and Huntsman Exploration.
Diversification Opportunities for Macmahon Holdings and Huntsman Exploration
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macmahon and Huntsman is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Macmahon Holdings Limited and Huntsman Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntsman Exploration 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 Huntsman Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntsman Exploration has no effect on the direction of Macmahon Holdings i.e., Macmahon Holdings and Huntsman Exploration go up and down completely randomly.
Pair Corralation between Macmahon Holdings and Huntsman Exploration
If you would invest 25.00 in Macmahon Holdings Limited on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Macmahon Holdings Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macmahon Holdings Limited vs. Huntsman Exploration
Performance |
| Timeline |
| Macmahon Holdings |
| Huntsman Exploration |
Macmahon Holdings and Huntsman Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macmahon Holdings and Huntsman Exploration
The main advantage of trading using opposite Macmahon Holdings and Huntsman Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macmahon Holdings position performs unexpectedly, Huntsman Exploration 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 Huntsman Exploration will offset losses from the drop in Huntsman Exploration's long position.| Macmahon Holdings vs. Celsius Holdings | Macmahon Holdings vs. Diageo PLC ADR | Macmahon Holdings vs. Oatly Group AB | Macmahon Holdings vs. Shake Shack |
| Huntsman Exploration vs. Norra Metals Corp | Huntsman Exploration vs. ZincX Resources Corp | Huntsman Exploration vs. Nuinsco Resources Limited | Huntsman Exploration vs. South Star Battery |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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