Correlation Between Mcmillan Shakespeare and EP Financial
Can any of the company-specific risk be diversified away by investing in both Mcmillan Shakespeare 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 Mcmillan Shakespeare and EP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mcmillan Shakespeare and EP Financial Group, you can compare the effects of market volatilities on Mcmillan Shakespeare 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 Mcmillan Shakespeare with a short position of EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mcmillan Shakespeare and EP Financial.
Diversification Opportunities for Mcmillan Shakespeare and EP Financial
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mcmillan and EP1 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mcmillan Shakespeare 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 Mcmillan Shakespeare 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 Mcmillan Shakespeare 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 Mcmillan Shakespeare i.e., Mcmillan Shakespeare and EP Financial go up and down completely randomly.
Pair Corralation between Mcmillan Shakespeare and EP Financial
Assuming the 90 days trading horizon Mcmillan Shakespeare is expected to under-perform the EP Financial. But the stock apears to be less risky and, when comparing its historical volatility, Mcmillan Shakespeare is 1.48 times less risky than EP Financial. The stock trades about 0.0 of its potential returns per unit of risk. The EP Financial Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 41.00 in EP Financial Group on September 12, 2024 and sell it today you would earn a total of 11.00 from holding EP Financial Group or generate 26.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mcmillan Shakespeare vs. EP Financial Group
Performance |
| Timeline |
| Mcmillan Shakespeare |
| EP Financial Group |
Mcmillan Shakespeare and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mcmillan Shakespeare and EP Financial
The main advantage of trading using opposite Mcmillan Shakespeare and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mcmillan Shakespeare 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.| Mcmillan Shakespeare vs. Macquarie Bank Limited | Mcmillan Shakespeare vs. Qbe Insurance Group | Mcmillan Shakespeare vs. Dexus Convenience Retail | Mcmillan Shakespeare vs. Bank of Queensland |
| EP Financial vs. Richmond Vanadium Technology | EP Financial vs. Cleanaway Waste Management | EP Financial vs. Global Health | EP Financial vs. Oceania Healthcare |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |