Correlation Between MMA Offshore and Smith Douglas
Can any of the company-specific risk be diversified away by investing in both MMA Offshore and Smith Douglas 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 MMA Offshore and Smith Douglas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MMA Offshore Limited and Smith Douglas Homes, you can compare the effects of market volatilities on MMA Offshore and Smith Douglas 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 MMA Offshore with a short position of Smith Douglas. Check out your portfolio center. Please also check ongoing floating volatility patterns of MMA Offshore and Smith Douglas.
Diversification Opportunities for MMA Offshore and Smith Douglas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MMA and Smith is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MMA Offshore Limited and Smith Douglas Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smith Douglas Homes and MMA Offshore 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 MMA Offshore Limited are associated (or correlated) with Smith Douglas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smith Douglas Homes has no effect on the direction of MMA Offshore i.e., MMA Offshore and Smith Douglas go up and down completely randomly.
Pair Corralation between MMA Offshore and Smith Douglas
Assuming the 90 days horizon MMA Offshore Limited is expected to generate 21.74 times more return on investment than Smith Douglas. However, MMA Offshore is 21.74 times more volatile than Smith Douglas Homes. It trades about 0.08 of its potential returns per unit of risk. Smith Douglas Homes is currently generating about 0.06 per unit of risk. If you would invest 16.00 in MMA Offshore Limited on September 2, 2024 and sell it today you would earn a total of 134.00 from holding MMA Offshore Limited or generate 837.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 70.67% |
| Values | Daily Returns |
MMA Offshore Limited vs. Smith Douglas Homes
Performance |
| Timeline |
| MMA Offshore Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Smith Douglas Homes |
MMA Offshore and Smith Douglas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MMA Offshore and Smith Douglas
The main advantage of trading using opposite MMA Offshore and Smith Douglas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MMA Offshore position performs unexpectedly, Smith Douglas 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 Smith Douglas will offset losses from the drop in Smith Douglas' long position.| MMA Offshore vs. SunOpta | MMA Offshore vs. Everspin Technologies | MMA Offshore vs. ON Semiconductor | MMA Offshore vs. Aehr Test Systems |
| Smith Douglas vs. Arhaus Inc | Smith Douglas vs. Floor Decor Holdings | Smith Douglas vs. Haverty Furniture Companies | Smith Douglas vs. Kingfisher plc |
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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