Correlation Between Madison Square and OFFICE DEPOT
Can any of the company-specific risk be diversified away by investing in both Madison Square and OFFICE DEPOT 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 Madison Square and OFFICE DEPOT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Madison Square Garden and OFFICE DEPOT, you can compare the effects of market volatilities on Madison Square and OFFICE DEPOT 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 Madison Square with a short position of OFFICE DEPOT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison Square and OFFICE DEPOT.
Diversification Opportunities for Madison Square and OFFICE DEPOT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Madison and OFFICE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Madison Square Garden and OFFICE DEPOT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFFICE DEPOT and Madison Square 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 Madison Square Garden are associated (or correlated) with OFFICE DEPOT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFFICE DEPOT has no effect on the direction of Madison Square i.e., Madison Square and OFFICE DEPOT go up and down completely randomly.
Pair Corralation between Madison Square and OFFICE DEPOT
If you would invest 17,400 in Madison Square Garden on September 3, 2024 and sell it today you would earn a total of 4,400 from holding Madison Square Garden or generate 25.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Madison Square Garden vs. OFFICE DEPOT
Performance |
| Timeline |
| Madison Square Garden |
| OFFICE DEPOT |
Madison Square and OFFICE DEPOT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Madison Square and OFFICE DEPOT
The main advantage of trading using opposite Madison Square and OFFICE DEPOT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madison Square position performs unexpectedly, OFFICE DEPOT 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 OFFICE DEPOT will offset losses from the drop in OFFICE DEPOT's long position.| Madison Square vs. Plastic Omnium | Madison Square vs. PSI Software AG | Madison Square vs. Goodyear Tire Rubber | Madison Square vs. Constellation Software |
| OFFICE DEPOT vs. EHEALTH | OFFICE DEPOT vs. Ameriprise Financial | OFFICE DEPOT vs. CHIBA BANK | OFFICE DEPOT vs. MINCO SILVER |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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