Correlation Between Maggie Beer and Cromwell Property

Can any of the company-specific risk be diversified away by investing in both Maggie Beer and Cromwell Property 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 Maggie Beer and Cromwell Property into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maggie Beer Holdings and Cromwell Property Group, you can compare the effects of market volatilities on Maggie Beer and Cromwell Property 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 Maggie Beer with a short position of Cromwell Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maggie Beer and Cromwell Property.

Diversification Opportunities for Maggie Beer and Cromwell Property

0.62

Correlation Coefficient

Maggie Beer  Cromwell Property

Poor diversification

The 3 months correlation between Maggie and Cromwell is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Maggie Beer Holdings and Cromwell Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cromwell Property and Maggie Beer 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 Maggie Beer Holdings are associated (or correlated) with Cromwell Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cromwell Property has no effect on the direction of Maggie Beer i.e., Maggie Beer and Cromwell Property go up and down completely randomly.

Pair Corralation between Maggie Beer and Cromwell Property

Assuming the 90 days trading horizon Maggie Beer Holdings is expected to generate 1.19 times more return on investment than Cromwell Property. However, Maggie Beer is 1.19 times more volatile than Cromwell Property Group. It trades about 0.01 of its potential returns per unit of risk. Cromwell Property Group is currently generating about -0.01 per unit of risk. If you would invest  5.70  in Maggie Beer Holdings on October 24, 2024 and sell it today you would lose (0.10) from holding Maggie Beer Holdings or give up 1.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Maggie Beer Holdings  vs.  Cromwell Property Group

Maggie Beer Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maggie Beer Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Maggie Beer is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Cromwell Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cromwell Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cromwell Property is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Maggie Beer and Cromwell Property

The main advantage of trading using opposite Maggie Beer and Cromwell Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maggie Beer position performs unexpectedly, Cromwell Property 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 Cromwell Property will offset losses from the drop in Cromwell Property's long position.

The idea behind Maggie Beer Holdings and Cromwell Property 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.