Correlation Between MAVEN WIRELESS and Major Drilling

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Can any of the company-specific risk be diversified away by investing in both MAVEN WIRELESS and Major Drilling 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 MAVEN WIRELESS and Major Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAVEN WIRELESS SWEDEN and Major Drilling Group, you can compare the effects of market volatilities on MAVEN WIRELESS and Major Drilling 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 MAVEN WIRELESS with a short position of Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAVEN WIRELESS and Major Drilling.

Diversification Opportunities for MAVEN WIRELESS and Major Drilling

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between MAVEN and Major is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding MAVEN WIRELESS SWEDEN and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group and MAVEN WIRELESS 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 MAVEN WIRELESS SWEDEN are associated (or correlated) with Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of MAVEN WIRELESS i.e., MAVEN WIRELESS and Major Drilling go up and down completely randomly.

Pair Corralation between MAVEN WIRELESS and Major Drilling

Assuming the 90 days horizon MAVEN WIRELESS SWEDEN is expected to under-perform the Major Drilling. In addition to that, MAVEN WIRELESS is 1.14 times more volatile than Major Drilling Group. It trades about -0.13 of its total potential returns per unit of risk. Major Drilling Group is currently generating about 0.07 per unit of volatility. If you would invest  540.00  in Major Drilling Group on September 5, 2024 and sell it today you would earn a total of  30.00  from holding Major Drilling Group or generate 5.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

MAVEN WIRELESS SWEDEN  vs.  Major Drilling Group

 Performance 
       Timeline  
MAVEN WIRELESS SWEDEN 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MAVEN WIRELESS SWEDEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Major Drilling Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Major Drilling Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Major Drilling is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MAVEN WIRELESS and Major Drilling Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MAVEN WIRELESS and Major Drilling

The main advantage of trading using opposite MAVEN WIRELESS and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAVEN WIRELESS position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.
The idea behind MAVEN WIRELESS SWEDEN and Major Drilling Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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