Correlation Between Hawsons Iron and Maggie Beer
Can any of the company-specific risk be diversified away by investing in both Hawsons Iron 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 Hawsons Iron and Maggie Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawsons Iron and Maggie Beer Holdings, you can compare the effects of market volatilities on Hawsons Iron 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 Hawsons Iron with a short position of Maggie Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawsons Iron and Maggie Beer.
Diversification Opportunities for Hawsons Iron and Maggie Beer
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hawsons and Maggie is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hawsons Iron 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 Hawsons Iron 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 Hawsons Iron 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 Hawsons Iron i.e., Hawsons Iron and Maggie Beer go up and down completely randomly.
Pair Corralation between Hawsons Iron and Maggie Beer
Assuming the 90 days trading horizon Hawsons Iron is expected to under-perform the Maggie Beer. But the stock apears to be less risky and, when comparing its historical volatility, Hawsons Iron is 1.14 times less risky than Maggie Beer. The stock trades about -0.09 of its potential returns per unit of risk. The Maggie Beer Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 6.30 in Maggie Beer Holdings on October 3, 2024 and sell it today you would lose (0.50) from holding Maggie Beer Holdings or give up 7.94% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hawsons Iron vs. Maggie Beer Holdings
Performance |
Timeline |
Hawsons Iron |
Maggie Beer Holdings |
Hawsons Iron and Maggie Beer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hawsons Iron and Maggie Beer
The main advantage of trading using opposite Hawsons Iron and Maggie Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawsons Iron 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.Hawsons Iron vs. Northern Star Resources | Hawsons Iron vs. Evolution Mining | Hawsons Iron vs. Bluescope Steel | Hawsons Iron vs. Sandfire Resources NL |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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