Correlation Between Macmahon Holdings and Metallis Resources
Can any of the company-specific risk be diversified away by investing in both Macmahon Holdings and Metallis 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 Metallis 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 Metallis Resources, you can compare the effects of market volatilities on Macmahon Holdings and Metallis 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 Metallis Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macmahon Holdings and Metallis Resources.
Diversification Opportunities for Macmahon Holdings and Metallis Resources
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Macmahon and Metallis is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Macmahon Holdings Limited and Metallis Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metallis 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 Metallis Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metallis Resources has no effect on the direction of Macmahon Holdings i.e., Macmahon Holdings and Metallis Resources go up and down completely randomly.
Pair Corralation between Macmahon Holdings and Metallis Resources
If you would invest 16.00 in Metallis Resources on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Metallis Resources or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Macmahon Holdings Limited vs. Metallis Resources
Performance |
| Timeline |
| Macmahon Holdings |
| Metallis Resources |
Macmahon Holdings and Metallis Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macmahon Holdings and Metallis Resources
The main advantage of trading using opposite Macmahon Holdings and Metallis Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macmahon Holdings position performs unexpectedly, Metallis 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 Metallis Resources will offset losses from the drop in Metallis Resources' long position.| Macmahon Holdings vs. South32 Limited | Macmahon Holdings vs. NioCorp Developments Ltd | Macmahon Holdings vs. HUMANA INC | Macmahon Holdings vs. SCOR PK |
| Metallis Resources vs. Macmahon Holdings Limited | Metallis Resources vs. Rokmaster Resources Corp | Metallis Resources vs. Hudson Resources | Metallis Resources 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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