Correlation Between MDU Resources and Alliance Global
Can any of the company-specific risk be diversified away by investing in both MDU Resources and Alliance Global 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 MDU Resources and Alliance Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MDU Resources Group and Alliance Global Group, you can compare the effects of market volatilities on MDU Resources and Alliance Global 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 MDU Resources with a short position of Alliance Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDU Resources and Alliance Global.
Diversification Opportunities for MDU Resources and Alliance Global
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MDU and Alliance is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding MDU Resources Group and Alliance Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Global Group and MDU Resources 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 MDU Resources Group are associated (or correlated) with Alliance Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Global Group has no effect on the direction of MDU Resources i.e., MDU Resources and Alliance Global go up and down completely randomly.
Pair Corralation between MDU Resources and Alliance Global
Considering the 90-day investment horizon MDU Resources Group is expected to generate 0.86 times more return on investment than Alliance Global. However, MDU Resources Group is 1.17 times less risky than Alliance Global. It trades about 0.68 of its potential returns per unit of risk. Alliance Global Group is currently generating about -0.22 per unit of risk. If you would invest 1,543 in MDU Resources Group on September 4, 2024 and sell it today you would earn a total of 470.00 from holding MDU Resources Group or generate 30.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MDU Resources Group vs. Alliance Global Group
Performance |
| Timeline |
| MDU Resources Group |
| Alliance Global Group |
MDU Resources and Alliance Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MDU Resources and Alliance Global
The main advantage of trading using opposite MDU Resources and Alliance Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MDU Resources position performs unexpectedly, Alliance Global 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 Alliance Global will offset losses from the drop in Alliance Global's long position.| MDU Resources vs. Griffon | MDU Resources vs. Brookfield Business Partners | MDU Resources vs. Matthews International | MDU Resources vs. Steel Partners Holdings |
| Alliance Global vs. Grupo Bimbo SAB | Alliance Global vs. Grupo Financiero Inbursa | Alliance Global vs. Becle SA de | Alliance Global vs. HUMANA INC |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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