Correlation Between Macmahon Holdings and Winsome Resources
Can any of the company-specific risk be diversified away by investing in both Macmahon Holdings and Winsome 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 Winsome 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 Winsome Resources Limited, you can compare the effects of market volatilities on Macmahon Holdings and Winsome 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 Winsome Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macmahon Holdings and Winsome Resources.
Diversification Opportunities for Macmahon Holdings and Winsome Resources
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macmahon and Winsome is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Macmahon Holdings Limited and Winsome Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winsome 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 Winsome Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winsome Resources has no effect on the direction of Macmahon Holdings i.e., Macmahon Holdings and Winsome Resources go up and down completely randomly.
Pair Corralation between Macmahon Holdings and Winsome Resources
If you would invest 25.00 in Macmahon Holdings Limited on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Macmahon Holdings Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macmahon Holdings Limited vs. Winsome Resources Limited
Performance |
| Timeline |
| Macmahon Holdings |
| Winsome Resources |
Macmahon Holdings and Winsome Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macmahon Holdings and Winsome Resources
The main advantage of trading using opposite Macmahon Holdings and Winsome Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macmahon Holdings position performs unexpectedly, Winsome 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 Winsome Resources will offset losses from the drop in Winsome Resources' long position.| Macmahon Holdings vs. South32 Limited | Macmahon Holdings vs. NioCorp Developments Ltd | Macmahon Holdings vs. HUMANA INC | Macmahon Holdings vs. SCOR PK |
| Winsome Resources vs. Legacy Education | Winsome Resources vs. Apple Inc | Winsome Resources vs. NVIDIA | Winsome Resources vs. Microsoft |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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