Correlation Between Multi Ways and Black Diamond
Can any of the company-specific risk be diversified away by investing in both Multi Ways and Black Diamond 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 Multi Ways and Black Diamond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Ways Holdings and Black Diamond Group, you can compare the effects of market volatilities on Multi Ways and Black Diamond 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 Multi Ways with a short position of Black Diamond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Ways and Black Diamond.
Diversification Opportunities for Multi Ways and Black Diamond
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Multi and Black is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Multi Ways Holdings and Black Diamond Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Diamond Group and Multi Ways 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 Multi Ways Holdings are associated (or correlated) with Black Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Diamond Group has no effect on the direction of Multi Ways i.e., Multi Ways and Black Diamond go up and down completely randomly.
Pair Corralation between Multi Ways and Black Diamond
Considering the 90-day investment horizon Multi Ways Holdings is expected to under-perform the Black Diamond. In addition to that, Multi Ways is 4.0 times more volatile than Black Diamond Group. It trades about -0.04 of its total potential returns per unit of risk. Black Diamond Group is currently generating about 0.08 per unit of volatility. If you would invest 371.00 in Black Diamond Group on October 21, 2024 and sell it today you would earn a total of 272.00 from holding Black Diamond Group or generate 73.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 82.96% |
| Values | Daily Returns |
Multi Ways Holdings vs. Black Diamond Group
Performance |
| Timeline |
| Multi Ways Holdings |
| Black Diamond Group |
Multi Ways and Black Diamond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Ways and Black Diamond
The main advantage of trading using opposite Multi Ways and Black Diamond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Ways position performs unexpectedly, Black Diamond 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 Black Diamond will offset losses from the drop in Black Diamond's long position.| Multi Ways vs. FlexShopper | Multi Ways vs. Hertz Global Holdings | Multi Ways vs. HyreCar | Multi Ways vs. Avis Budget Group |
| Black Diamond vs. BOC Aviation Limited | Black Diamond vs. Alta Equipment Group | Black Diamond vs. Ashtead Group plc | Black Diamond vs. African Discovery Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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