Correlation Between Makita Corp and Makita
Can any of the company-specific risk be diversified away by investing in both Makita Corp and Makita 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 Makita Corp and Makita into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Makita Corp and Makita, you can compare the effects of market volatilities on Makita Corp and Makita 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 Makita Corp with a short position of Makita. Check out your portfolio center. Please also check ongoing floating volatility patterns of Makita Corp and Makita.
Diversification Opportunities for Makita Corp and Makita
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Makita and Makita is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Makita Corp and Makita in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makita and Makita Corp 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 Makita Corp are associated (or correlated) with Makita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makita has no effect on the direction of Makita Corp i.e., Makita Corp and Makita go up and down completely randomly.
Pair Corralation between Makita Corp and Makita
If you would invest 2,720 in Makita Corp on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Makita Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.89% |
| Values | Daily Returns |
Makita Corp vs. Makita
Performance |
| Timeline |
| Makita Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Makita |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Makita Corp and Makita Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Makita Corp and Makita
The main advantage of trading using opposite Makita Corp and Makita positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Makita Corp position performs unexpectedly, Makita 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 Makita will offset losses from the drop in Makita's long position.| Makita Corp vs. Snap On | Makita Corp vs. Stanley Black Decker | Makita Corp vs. Eastern Co | Makita Corp vs. Hillman Solutions Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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