Correlation Between Macmahon Holdings and Geodrill
Can any of the company-specific risk be diversified away by investing in both Macmahon Holdings and Geodrill 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 Geodrill 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 Geodrill Limited, you can compare the effects of market volatilities on Macmahon Holdings and Geodrill 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 Geodrill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macmahon Holdings and Geodrill.
Diversification Opportunities for Macmahon Holdings and Geodrill
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macmahon and Geodrill is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Macmahon Holdings Limited and Geodrill Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geodrill Limited 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 Geodrill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geodrill Limited has no effect on the direction of Macmahon Holdings i.e., Macmahon Holdings and Geodrill go up and down completely randomly.
Pair Corralation between Macmahon Holdings and Geodrill
Assuming the 90 days horizon Macmahon Holdings Limited is expected to generate 1.65 times more return on investment than Geodrill. However, Macmahon Holdings is 1.65 times more volatile than Geodrill Limited. It trades about 0.07 of its potential returns per unit of risk. Geodrill Limited is currently generating about 0.01 per unit of risk. If you would invest 10.00 in Macmahon Holdings Limited on October 20, 2024 and sell it today you would earn a total of 12.00 from holding Macmahon Holdings Limited or generate 120.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.73% |
| Values | Daily Returns |
Macmahon Holdings Limited vs. Geodrill Limited
Performance |
| Timeline |
| Macmahon Holdings |
| Geodrill Limited |
Macmahon Holdings and Geodrill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macmahon Holdings and Geodrill
The main advantage of trading using opposite Macmahon Holdings and Geodrill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macmahon Holdings position performs unexpectedly, Geodrill 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 Geodrill will offset losses from the drop in Geodrill's long position.| Macmahon Holdings vs. Major Drilling Group | Macmahon Holdings vs. Forsys Metals Corp | Macmahon Holdings vs. Black Mammoth Metals | Macmahon Holdings vs. Getty Copper |
| Geodrill vs. Macmahon Holdings Limited | Geodrill vs. Rokmaster Resources Corp | Geodrill vs. Hudson Resources | Geodrill vs. Thunder Gold 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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