Correlation Between Affiliated Managers and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both Affiliated Managers and Maiden Holdings 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 Affiliated Managers and Maiden Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Managers Group and Maiden Holdings North, you can compare the effects of market volatilities on Affiliated Managers and Maiden Holdings 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 Affiliated Managers with a short position of Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and Maiden Holdings.
Diversification Opportunities for Affiliated Managers and Maiden Holdings
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Affiliated and Maiden is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group and Maiden Holdings North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings North and Affiliated Managers 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 Affiliated Managers Group are associated (or correlated) with Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings North has no effect on the direction of Affiliated Managers i.e., Affiliated Managers and Maiden Holdings go up and down completely randomly.
Pair Corralation between Affiliated Managers and Maiden Holdings
Considering the 90-day investment horizon Affiliated Managers Group is expected to generate 0.38 times more return on investment than Maiden Holdings. However, Affiliated Managers Group is 2.6 times less risky than Maiden Holdings. It trades about -0.33 of its potential returns per unit of risk. Maiden Holdings North is currently generating about -0.21 per unit of risk. If you would invest 2,493 in Affiliated Managers Group on August 28, 2024 and sell it today you would lose (126.00) from holding Affiliated Managers Group or give up 5.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affiliated Managers Group vs. Maiden Holdings North
Performance |
| Timeline |
| Affiliated Managers |
| Maiden Holdings North |
Affiliated Managers and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affiliated Managers and Maiden Holdings
The main advantage of trading using opposite Affiliated Managers and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers position performs unexpectedly, Maiden Holdings 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.| Affiliated Managers vs. DBA Sempra 5750 | Affiliated Managers vs. CMS Energy Corp | Affiliated Managers vs. American Financial Group | Affiliated Managers vs. National Rural Utilities |
| Maiden Holdings vs. Maiden Holdings | Maiden Holdings vs. Affiliated Managers Group | Maiden Holdings vs. Entergy New Orleans | Maiden Holdings vs. American Financial Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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