Correlation Between Macmahon Holdings and Ceylon Graphite
Can any of the company-specific risk be diversified away by investing in both Macmahon Holdings and Ceylon Graphite 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 Ceylon Graphite 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 Ceylon Graphite Corp, you can compare the effects of market volatilities on Macmahon Holdings and Ceylon Graphite 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 Ceylon Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macmahon Holdings and Ceylon Graphite.
Diversification Opportunities for Macmahon Holdings and Ceylon Graphite
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macmahon and Ceylon is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Macmahon Holdings Limited and Ceylon Graphite Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Graphite Corp 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 Ceylon Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Graphite Corp has no effect on the direction of Macmahon Holdings i.e., Macmahon Holdings and Ceylon Graphite go up and down completely randomly.
Pair Corralation between Macmahon Holdings and Ceylon Graphite
If you would invest 1.33 in Ceylon Graphite Corp on September 3, 2024 and sell it today you would lose (0.04) from holding Ceylon Graphite Corp or give up 3.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macmahon Holdings Limited vs. Ceylon Graphite Corp
Performance |
| Timeline |
| Macmahon Holdings |
| Ceylon Graphite Corp |
Macmahon Holdings and Ceylon Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macmahon Holdings and Ceylon Graphite
The main advantage of trading using opposite Macmahon Holdings and Ceylon Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macmahon Holdings position performs unexpectedly, Ceylon Graphite 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 Ceylon Graphite will offset losses from the drop in Ceylon Graphite's long position.| Macmahon Holdings vs. Advantage Solutions | Macmahon Holdings vs. Atlas Corp | Macmahon Holdings vs. PureCycle Technologies | Macmahon Holdings vs. WM Technology |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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