Correlation Between Maximus and Wilhelmina
Can any of the company-specific risk be diversified away by investing in both Maximus and Wilhelmina 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 Maximus and Wilhelmina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maximus and Wilhelmina, you can compare the effects of market volatilities on Maximus and Wilhelmina 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 Maximus with a short position of Wilhelmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maximus and Wilhelmina.
Diversification Opportunities for Maximus and Wilhelmina
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maximus and Wilhelmina is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Maximus and Wilhelmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilhelmina and Maximus 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 Maximus are associated (or correlated) with Wilhelmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilhelmina has no effect on the direction of Maximus i.e., Maximus and Wilhelmina go up and down completely randomly.
Pair Corralation between Maximus and Wilhelmina
Considering the 90-day investment horizon Maximus is expected to generate 1.34 times less return on investment than Wilhelmina. But when comparing it to its historical volatility, Maximus is 2.91 times less risky than Wilhelmina. It trades about 0.02 of its potential returns per unit of risk. Wilhelmina is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 439.00 in Wilhelmina on October 21, 2024 and sell it today you would lose (88.00) from holding Wilhelmina or give up 20.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.18% |
| Values | Daily Returns |
Maximus vs. Wilhelmina
Performance |
| Timeline |
| Maximus |
| Wilhelmina |
Maximus and Wilhelmina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maximus and Wilhelmina
The main advantage of trading using opposite Maximus and Wilhelmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maximus position performs unexpectedly, Wilhelmina 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 Wilhelmina will offset losses from the drop in Wilhelmina's long position.| Maximus vs. Network 1 Technologies | Maximus vs. First Advantage Corp | Maximus vs. BrightView Holdings | Maximus vs. Civeo Corp |
| Wilhelmina vs. Network 1 Technologies | Wilhelmina vs. Rentokil Initial PLC | Wilhelmina vs. Mader Group Limited | Wilhelmina vs. SPAR 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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