Correlation Between Macmahon Holdings and Deep-South Resources
Can any of the company-specific risk be diversified away by investing in both Macmahon Holdings and Deep-South Resources 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 Deep-South Resources 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 Deep South Resources, you can compare the effects of market volatilities on Macmahon Holdings and Deep-South Resources 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 Deep-South Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macmahon Holdings and Deep-South Resources.
Diversification Opportunities for Macmahon Holdings and Deep-South Resources
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macmahon and Deep-South is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Macmahon Holdings Limited and Deep South Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deep South Resources 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 Deep-South Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deep South Resources has no effect on the direction of Macmahon Holdings i.e., Macmahon Holdings and Deep-South Resources go up and down completely randomly.
Pair Corralation between Macmahon Holdings and Deep-South Resources
If you would invest 6.00 in Deep South Resources on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Deep South Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.38% |
| Values | Daily Returns |
Macmahon Holdings Limited vs. Deep South Resources
Performance |
| Timeline |
| Macmahon Holdings |
| Deep South Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Macmahon Holdings and Deep-South Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macmahon Holdings and Deep-South Resources
The main advantage of trading using opposite Macmahon Holdings and Deep-South Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macmahon Holdings position performs unexpectedly, Deep-South Resources 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 Deep-South Resources will offset losses from the drop in Deep-South Resources' long position.| Macmahon Holdings vs. Esperion Therapeutics | Macmahon Holdings vs. Fevertree Drinks Plc | Macmahon Holdings vs. Compania Cervecerias Unidas | Macmahon Holdings vs. The Joint Corp |
| Deep-South Resources vs. Prime Meridian Resources | Deep-South Resources vs. Macmahon Holdings Limited | Deep-South Resources vs. Hudson Resources | Deep-South Resources vs. Rokmaster Resources 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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