Correlation Between Mosaic and Macmahon Holdings
Can any of the company-specific risk be diversified away by investing in both Mosaic and Macmahon Holdings 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 Mosaic and Macmahon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Mosaic and Macmahon Holdings Limited, you can compare the effects of market volatilities on Mosaic and Macmahon Holdings 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 Mosaic with a short position of Macmahon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mosaic and Macmahon Holdings.
Diversification Opportunities for Mosaic and Macmahon Holdings
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mosaic and Macmahon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and Macmahon Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macmahon Holdings and Mosaic 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 The Mosaic are associated (or correlated) with Macmahon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macmahon Holdings has no effect on the direction of Mosaic i.e., Mosaic and Macmahon Holdings go up and down completely randomly.
Pair Corralation between Mosaic and Macmahon Holdings
Considering the 90-day investment horizon The Mosaic is expected to generate 0.85 times more return on investment than Macmahon Holdings. However, The Mosaic is 1.17 times less risky than Macmahon Holdings. It trades about 0.0 of its potential returns per unit of risk. Macmahon Holdings Limited is currently generating about -0.22 per unit of risk. If you would invest 2,561 in The Mosaic on September 19, 2024 and sell it today you would lose (17.00) from holding The Mosaic or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Mosaic vs. Macmahon Holdings Limited
Performance |
| Timeline |
| Mosaic |
| Macmahon Holdings |
Mosaic and Macmahon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mosaic and Macmahon Holdings
The main advantage of trading using opposite Mosaic and Macmahon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mosaic position performs unexpectedly, Macmahon Holdings 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 Macmahon Holdings will offset losses from the drop in Macmahon Holdings' long position.The idea behind The Mosaic and Macmahon Holdings Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Macmahon Holdings vs. BorgWarner | Macmahon Holdings vs. RCS MediaGroup SpA | Macmahon Holdings vs. Playtika Holding Corp | Macmahon Holdings vs. CarsalesCom Ltd ADR |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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