Correlation Between Mayfield Childcare and EP Financial
Can any of the company-specific risk be diversified away by investing in both Mayfield Childcare and EP Financial 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 Mayfield Childcare and EP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayfield Childcare and EP Financial Group, you can compare the effects of market volatilities on Mayfield Childcare and EP Financial 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 Mayfield Childcare with a short position of EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayfield Childcare and EP Financial.
Diversification Opportunities for Mayfield Childcare and EP Financial
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mayfield and EP1 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mayfield Childcare and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group and Mayfield Childcare 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 Mayfield Childcare are associated (or correlated) with EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of Mayfield Childcare i.e., Mayfield Childcare and EP Financial go up and down completely randomly.
Pair Corralation between Mayfield Childcare and EP Financial
Assuming the 90 days trading horizon Mayfield Childcare is expected to under-perform the EP Financial. But the stock apears to be less risky and, when comparing its historical volatility, Mayfield Childcare is 1.43 times less risky than EP Financial. The stock trades about -0.08 of its potential returns per unit of risk. The EP Financial Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 44.00 in EP Financial Group on September 13, 2024 and sell it today you would earn a total of 8.00 from holding EP Financial Group or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayfield Childcare vs. EP Financial Group
Performance |
| Timeline |
| Mayfield Childcare |
| EP Financial Group |
Mayfield Childcare and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayfield Childcare and EP Financial
The main advantage of trading using opposite Mayfield Childcare and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfield Childcare position performs unexpectedly, EP Financial 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 EP Financial will offset losses from the drop in EP Financial's long position.| Mayfield Childcare vs. Macquarie Group | Mayfield Childcare vs. Rio Tinto | Mayfield Childcare vs. CSL | Mayfield Childcare vs. Commonwealth Bank of |
| EP Financial vs. Bio Gene Technology | EP Financial vs. Cleanaway Waste Management | EP Financial vs. Platinum Asset Management | EP Financial vs. K2 Asset Management |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |