Correlation Between Macmahon Holdings and Murchison Minerals
Can any of the company-specific risk be diversified away by investing in both Macmahon Holdings and Murchison Minerals 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 Murchison Minerals 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 Murchison Minerals, you can compare the effects of market volatilities on Macmahon Holdings and Murchison Minerals 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 Murchison Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macmahon Holdings and Murchison Minerals.
Diversification Opportunities for Macmahon Holdings and Murchison Minerals
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macmahon and Murchison is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Macmahon Holdings Limited and Murchison Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murchison Minerals 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 Murchison Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murchison Minerals has no effect on the direction of Macmahon Holdings i.e., Macmahon Holdings and Murchison Minerals go up and down completely randomly.
Pair Corralation between Macmahon Holdings and Murchison Minerals
Assuming the 90 days horizon Macmahon Holdings Limited is expected to generate 0.61 times more return on investment than Murchison Minerals. However, Macmahon Holdings Limited is 1.63 times less risky than Murchison Minerals. It trades about 0.13 of its potential returns per unit of risk. Murchison Minerals is currently generating about 0.0 per unit of risk. If you would invest 8.79 in Macmahon Holdings Limited on December 4, 2024 and sell it today you would earn a total of 11.21 from holding Macmahon Holdings Limited or generate 127.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 27.68% |
| Values | Daily Returns |
Macmahon Holdings Limited vs. Murchison Minerals
Performance |
| Timeline |
| Macmahon Holdings |
| Murchison Minerals |
Macmahon Holdings and Murchison Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macmahon Holdings and Murchison Minerals
The main advantage of trading using opposite Macmahon Holdings and Murchison Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macmahon Holdings position performs unexpectedly, Murchison Minerals 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 Murchison Minerals will offset losses from the drop in Murchison Minerals' long position.| Macmahon Holdings vs. National CineMedia | Macmahon Holdings vs. Sphere Entertainment Co | Macmahon Holdings vs. ZW Data Action | Macmahon Holdings vs. Deluxe |
| Murchison Minerals vs. Niobay Metals | Murchison Minerals vs. Mundoro Capital | Murchison Minerals vs. E79 Resources Corp | Murchison Minerals vs. Norra Metals 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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