Correlation Between Sterling Metals and Macmahon Holdings
Can any of the company-specific risk be diversified away by investing in both Sterling Metals and Macmahon Holdings 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 Sterling Metals and Macmahon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Metals Corp and Macmahon Holdings Limited, you can compare the effects of market volatilities on Sterling Metals and Macmahon Holdings 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 Sterling Metals with a short position of Macmahon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Metals and Macmahon Holdings.
Diversification Opportunities for Sterling Metals and Macmahon Holdings
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sterling and Macmahon is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Metals Corp and Macmahon Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macmahon Holdings and Sterling Metals 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 Sterling Metals Corp are associated (or correlated) with Macmahon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macmahon Holdings has no effect on the direction of Sterling Metals i.e., Sterling Metals and Macmahon Holdings go up and down completely randomly.
Pair Corralation between Sterling Metals and Macmahon Holdings
If you would invest 25.00 in Macmahon Holdings Limited on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Macmahon Holdings Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sterling Metals Corp vs. Macmahon Holdings Limited
Performance |
| Timeline |
| Sterling Metals Corp |
| Macmahon Holdings |
Sterling Metals and Macmahon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Metals and Macmahon Holdings
The main advantage of trading using opposite Sterling Metals and Macmahon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Metals position performs unexpectedly, Macmahon Holdings 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 Macmahon Holdings will offset losses from the drop in Macmahon Holdings' long position.| Sterling Metals vs. Progressive Planet Solutions | Sterling Metals vs. Durango Resources | Sterling Metals vs. Avarone Metals | Sterling Metals vs. Mundoro Capital |
| Macmahon Holdings vs. South32 Limited | Macmahon Holdings vs. NioCorp Developments Ltd | Macmahon Holdings vs. HUMANA INC | Macmahon Holdings vs. SCOR PK |
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 Stocks Directory module to find actively traded stocks across global markets.
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