Correlation Between MG Plc and BH Macro
Can any of the company-specific risk be diversified away by investing in both MG Plc and BH Macro 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 MG Plc and BH Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MG Plc and BH Macro Limited, you can compare the effects of market volatilities on MG Plc and BH Macro 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 MG Plc with a short position of BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of MG Plc and BH Macro.
Diversification Opportunities for MG Plc and BH Macro
Very good diversification
The 3 months correlation between MNG and BHMU is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding MG Plc and BH Macro Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Macro Limited and MG Plc 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 MG Plc are associated (or correlated) with BH Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Macro Limited has no effect on the direction of MG Plc i.e., MG Plc and BH Macro go up and down completely randomly.
Pair Corralation between MG Plc and BH Macro
Assuming the 90 days trading horizon MG Plc is expected to under-perform the BH Macro. But the stock apears to be less risky and, when comparing its historical volatility, MG Plc is 1.27 times less risky than BH Macro. The stock trades about -0.06 of its potential returns per unit of risk. The BH Macro Limited is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 382.00 in BH Macro Limited on August 29, 2024 and sell it today you would earn a total of 26.00 from holding BH Macro Limited or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MG Plc vs. BH Macro Limited
Performance |
| Timeline |
| MG Plc |
| BH Macro Limited |
MG Plc and BH Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MG Plc and BH Macro
The main advantage of trading using opposite MG Plc and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MG Plc position performs unexpectedly, BH Macro 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 BH Macro will offset losses from the drop in BH Macro's long position.| MG Plc vs. Norman Broadbent Plc | MG Plc vs. Kaufman Et Broad | MG Plc vs. Broadcom | MG Plc vs. Zoom Video Communications |
| BH Macro vs. Toyota Motor Corp | BH Macro vs. Lendinvest PLC | BH Macro vs. Neometals | BH Macro vs. Coor Service Management |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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