Correlation Between Maiden Holdings and Virco Manufacturing
Can any of the company-specific risk be diversified away by investing in both Maiden Holdings and Virco Manufacturing 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 Virco Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and Virco Manufacturing, you can compare the effects of market volatilities on Maiden Holdings and Virco Manufacturing 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 Virco Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and Virco Manufacturing.
Diversification Opportunities for Maiden Holdings and Virco Manufacturing
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Maiden and Virco is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Virco Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virco Manufacturing 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 Virco Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virco Manufacturing has no effect on the direction of Maiden Holdings i.e., Maiden Holdings and Virco Manufacturing go up and down completely randomly.
Pair Corralation between Maiden Holdings and Virco Manufacturing
Given the investment horizon of 90 days Maiden Holdings is expected to generate 0.3 times more return on investment than Virco Manufacturing. However, Maiden Holdings is 3.32 times less risky than Virco Manufacturing. It trades about -0.28 of its potential returns per unit of risk. Virco Manufacturing is currently generating about -0.27 per unit of risk. If you would invest 1,742 in Maiden Holdings on September 12, 2024 and sell it today you would lose (145.00) from holding Maiden Holdings or give up 8.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maiden Holdings vs. Virco Manufacturing
Performance |
| Timeline |
| Maiden Holdings |
| Virco Manufacturing |
Maiden Holdings and Virco Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and Virco Manufacturing
The main advantage of trading using opposite Maiden Holdings and Virco Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings position performs unexpectedly, Virco Manufacturing 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 Virco Manufacturing will offset losses from the drop in Virco Manufacturing'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 |
| Virco Manufacturing vs. Bassett Furniture Industries | Virco Manufacturing vs. Hooker Furniture | Virco Manufacturing vs. Natuzzi SpA | Virco Manufacturing vs. Flexsteel Industries |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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