Correlation Between Picton Mahoney and Harvest Equal
Can any of the company-specific risk be diversified away by investing in both Picton Mahoney and Harvest Equal 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 Picton Mahoney and Harvest Equal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Picton Mahoney Fortified and Harvest Equal Weight, you can compare the effects of market volatilities on Picton Mahoney and Harvest Equal 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 Picton Mahoney with a short position of Harvest Equal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Picton Mahoney and Harvest Equal.
Diversification Opportunities for Picton Mahoney and Harvest Equal
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Picton and Harvest is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Picton Mahoney Fortified and Harvest Equal Weight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Equal Weight and Picton Mahoney 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 Picton Mahoney Fortified are associated (or correlated) with Harvest Equal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Equal Weight has no effect on the direction of Picton Mahoney i.e., Picton Mahoney and Harvest Equal go up and down completely randomly.
Pair Corralation between Picton Mahoney and Harvest Equal
Assuming the 90 days trading horizon Picton Mahoney Fortified is expected to generate 0.76 times more return on investment than Harvest Equal. However, Picton Mahoney Fortified is 1.32 times less risky than Harvest Equal. It trades about 0.08 of its potential returns per unit of risk. Harvest Equal Weight is currently generating about 0.05 per unit of risk. If you would invest 1,453 in Picton Mahoney Fortified on September 12, 2024 and sell it today you would earn a total of 430.00 from holding Picton Mahoney Fortified or generate 29.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Picton Mahoney Fortified vs. Harvest Equal Weight
Performance |
| Timeline |
| Picton Mahoney Fortified |
| Harvest Equal Weight |
Picton Mahoney and Harvest Equal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Picton Mahoney and Harvest Equal
The main advantage of trading using opposite Picton Mahoney and Harvest Equal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Picton Mahoney position performs unexpectedly, Harvest Equal 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 Harvest Equal will offset losses from the drop in Harvest Equal's long position.| Picton Mahoney vs. Hamilton Enhanced Covered | Picton Mahoney vs. Hamilton Enhanced Multi Sector | Picton Mahoney vs. Hamilton Canadian Financials | Picton Mahoney vs. Real Estate E Commerce |
| Harvest Equal vs. Hamilton Enhanced Covered | Harvest Equal vs. Hamilton Enhanced Multi Sector | Harvest Equal vs. Hamilton Canadian Financials | Harvest Equal vs. Real Estate E Commerce |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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