Correlation Between Constellation Brands and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both Constellation Brands and Maiden 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 Constellation Brands and Maiden Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Brands Class and Maiden Holdings, you can compare the effects of market volatilities on Constellation Brands and Maiden 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 Constellation Brands with a short position of Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and Maiden Holdings.
Diversification Opportunities for Constellation Brands and Maiden Holdings
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Constellation and Maiden is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings and Constellation Brands 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 Constellation Brands Class are associated (or correlated) with Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of Constellation Brands i.e., Constellation Brands and Maiden Holdings go up and down completely randomly.
Pair Corralation between Constellation Brands and Maiden Holdings
Considering the 90-day investment horizon Constellation Brands Class is expected to generate 1.2 times more return on investment than Maiden Holdings. However, Constellation Brands is 1.2 times more volatile than Maiden Holdings. It trades about 0.03 of its potential returns per unit of risk. Maiden Holdings is currently generating about -0.06 per unit of risk. If you would invest 23,448 in Constellation Brands Class on August 31, 2024 and sell it today you would earn a total of 149.00 from holding Constellation Brands Class or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Constellation Brands Class vs. Maiden Holdings
Performance |
| Timeline |
| Constellation Brands |
| Maiden Holdings |
Constellation Brands and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Brands and Maiden Holdings
The main advantage of trading using opposite Constellation Brands and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Brands position performs unexpectedly, Maiden 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.| Constellation Brands vs. Brown Forman | Constellation Brands vs. Duckhorn Portfolio | Constellation Brands vs. MGP Ingredients | Constellation Brands vs. Brown Forman |
| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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