Correlation Between Macmahon Holdings and Lithium Power
Can any of the company-specific risk be diversified away by investing in both Macmahon Holdings and Lithium Power 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 Lithium Power 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 Lithium Power International, you can compare the effects of market volatilities on Macmahon Holdings and Lithium Power 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 Lithium Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macmahon Holdings and Lithium Power.
Diversification Opportunities for Macmahon Holdings and Lithium Power
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macmahon and Lithium is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Macmahon Holdings Limited and Lithium Power International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Power Intern 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 Lithium Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Power Intern has no effect on the direction of Macmahon Holdings i.e., Macmahon Holdings and Lithium Power go up and down completely randomly.
Pair Corralation between Macmahon Holdings and Lithium Power
If you would invest 11.00 in Macmahon Holdings Limited on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Macmahon Holdings Limited or generate 127.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.51% |
| Values | Daily Returns |
Macmahon Holdings Limited vs. Lithium Power International
Performance |
| Timeline |
| Macmahon Holdings |
| Lithium Power Intern |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Macmahon Holdings and Lithium Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macmahon Holdings and Lithium Power
The main advantage of trading using opposite Macmahon Holdings and Lithium Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macmahon Holdings position performs unexpectedly, Lithium Power 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 Lithium Power will offset losses from the drop in Lithium Power's 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 |
| Lithium Power vs. Macmahon Holdings Limited | Lithium Power vs. Rokmaster Resources Corp | Lithium Power vs. Hudson Resources | Lithium Power 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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