Correlation Between Blackstone Minerals and Macmahon Holdings

Can any of the company-specific risk be diversified away by investing in both Blackstone Minerals 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 Blackstone Minerals and Macmahon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blackstone Minerals and Macmahon Holdings Limited, you can compare the effects of market volatilities on Blackstone Minerals 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 Blackstone Minerals with a short position of Macmahon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone Minerals and Macmahon Holdings.

Diversification Opportunities for Blackstone Minerals and Macmahon Holdings

-0.64

Correlation Coefficient

Blackstone Minerals  Macmahon Holdings

Excellent diversification

The 3 months correlation between Blackstone and Macmahon is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Minerals and Macmahon Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macmahon Holdings and Blackstone Minerals 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 Blackstone Minerals 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 Blackstone Minerals i.e., Blackstone Minerals and Macmahon Holdings go up and down completely randomly.

Pair Corralation between Blackstone Minerals and Macmahon Holdings

Assuming the 90 days horizon Blackstone Minerals is expected to generate 16.06 times more return on investment than Macmahon Holdings. However, Blackstone Minerals is 16.06 times more volatile than Macmahon Holdings Limited. It trades about 0.12 of its potential returns per unit of risk. Macmahon Holdings Limited is currently generating about -0.18 per unit of risk. If you would invest  1.90  in Blackstone Minerals on December 2, 2024 and sell it today you would earn a total of  1.20  from holding Blackstone Minerals or generate 63.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.85%
Values	Daily Returns

Blackstone Minerals  vs.  Macmahon Holdings Limited

Blackstone Minerals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Minerals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blackstone Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Macmahon Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Macmahon Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Blackstone Minerals and Macmahon Holdings

The main advantage of trading using opposite Blackstone Minerals and Macmahon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone Minerals 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.

The idea behind Blackstone Minerals and Macmahon Holdings Limited 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.