Correlation Between Step One and Maggie Beer
Can any of the company-specific risk be diversified away by investing in both Step One and Maggie Beer 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 Step One and Maggie Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Step One Clothing and Maggie Beer Holdings, you can compare the effects of market volatilities on Step One and Maggie Beer 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 Step One with a short position of Maggie Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Step One and Maggie Beer.
Diversification Opportunities for Step One and Maggie Beer
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Step and Maggie is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Step One Clothing and Maggie Beer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maggie Beer Holdings and Step One 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 Step One Clothing are associated (or correlated) with Maggie Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maggie Beer Holdings has no effect on the direction of Step One i.e., Step One and Maggie Beer go up and down completely randomly.
Pair Corralation between Step One and Maggie Beer
Assuming the 90 days trading horizon Step One is expected to generate 2.07 times less return on investment than Maggie Beer. But when comparing it to its historical volatility, Step One Clothing is 1.31 times less risky than Maggie Beer. It trades about 0.03 of its potential returns per unit of risk. Maggie Beer Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5.40 in Maggie Beer Holdings on October 28, 2024 and sell it today you would earn a total of 0.10 from holding Maggie Beer Holdings or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Step One Clothing vs. Maggie Beer Holdings
Performance |
| Timeline |
| Step One Clothing |
| Maggie Beer Holdings |
Step One and Maggie Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Step One and Maggie Beer
The main advantage of trading using opposite Step One and Maggie Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Step One position performs unexpectedly, Maggie Beer 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 Maggie Beer will offset losses from the drop in Maggie Beer's long position.| Step One vs. Stelar Metals | Step One vs. Lykos Metals | Step One vs. Champion Iron | Step One vs. Sky Metals |
| Maggie Beer vs. Vitura Health Limited | Maggie Beer vs. Apiam Animal Health | Maggie Beer vs. Epsilon Healthcare | Maggie Beer vs. ACDC Metals |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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