Correlation Between Madison Square and Peel Mining
Can any of the company-specific risk be diversified away by investing in both Madison Square and Peel Mining 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 Peel Mining 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 Peel Mining Limited, you can compare the effects of market volatilities on Madison Square and Peel Mining 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 Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison Square and Peel Mining.
Diversification Opportunities for Madison Square and Peel Mining
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Madison and Peel is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Madison Square Garden and Peel Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining Limited 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 Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining Limited has no effect on the direction of Madison Square i.e., Madison Square and Peel Mining go up and down completely randomly.
Pair Corralation between Madison Square and Peel Mining
Assuming the 90 days horizon Madison Square Garden is expected to generate 0.24 times more return on investment than Peel Mining. However, Madison Square Garden is 4.13 times less risky than Peel Mining. It trades about 0.25 of its potential returns per unit of risk. Peel Mining Limited is currently generating about 0.01 per unit of risk. If you would invest 20,000 in Madison Square Garden on August 31, 2024 and sell it today you would earn a total of 1,800 from holding Madison Square Garden or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Madison Square Garden vs. Peel Mining Limited
Performance |
| Timeline |
| Madison Square Garden |
| Peel Mining Limited |
Madison Square and Peel Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Madison Square and Peel Mining
The main advantage of trading using opposite Madison Square and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madison Square position performs unexpectedly, Peel Mining 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 Peel Mining will offset losses from the drop in Peel Mining's long position.| Madison Square vs. Li Ning Company | Madison Square vs. Trip Group Limited | Madison Square vs. Superior Plus Corp | Madison Square vs. NMI Holdings |
| Peel Mining vs. Lion One Metals | Peel Mining vs. PLAY2CHILL SA ZY | Peel Mining vs. Madison Square Garden | Peel Mining vs. ePlay Digital |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |