Correlation Between Maiden Holdings and Franchise
Can any of the company-specific risk be diversified away by investing in both Maiden Holdings and Franchise 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 Maiden Holdings and Franchise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and Franchise Group, you can compare the effects of market volatilities on Maiden Holdings and Franchise 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 Maiden Holdings with a short position of Franchise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and Franchise.
Diversification Opportunities for Maiden Holdings and Franchise
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maiden and Franchise is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Franchise Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franchise Group and Maiden 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 Maiden Holdings are associated (or correlated) with Franchise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franchise Group has no effect on the direction of Maiden Holdings i.e., Maiden Holdings and Franchise go up and down completely randomly.
Pair Corralation between Maiden Holdings and Franchise
If you would invest 2,493 in Franchise Group on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Franchise Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Maiden Holdings vs. Franchise Group
Performance |
| Timeline |
| Maiden Holdings |
| Franchise Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Maiden Holdings and Franchise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and Franchise
The main advantage of trading using opposite Maiden Holdings and Franchise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings position performs unexpectedly, Franchise 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 Franchise will offset losses from the drop in Franchise's long position.| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
| Franchise vs. Compania Cervecerias Unidas | Franchise vs. Boston Beer | Franchise vs. Westrock Coffee | Franchise vs. Entravision Communications |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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