Correlation Between Maggie Beer and Insignia Financial

Can any of the company-specific risk be diversified away by investing in both Maggie Beer and Insignia Financial 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 Insignia Financial 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 Insignia Financial, you can compare the effects of market volatilities on Maggie Beer and Insignia Financial 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 Insignia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maggie Beer and Insignia Financial.

Diversification Opportunities for Maggie Beer and Insignia Financial

-0.55

Correlation Coefficient

Maggie Beer  Insignia Financial

Excellent diversification

The 3 months correlation between Maggie and Insignia is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Maggie Beer Holdings and Insignia Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insignia Financial 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 Insignia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insignia Financial has no effect on the direction of Maggie Beer i.e., Maggie Beer and Insignia Financial go up and down completely randomly.

Pair Corralation between Maggie Beer and Insignia Financial

Assuming the 90 days trading horizon Maggie Beer Holdings is expected to under-perform the Insignia Financial. In addition to that, Maggie Beer is 1.78 times more volatile than Insignia Financial. It trades about -0.03 of its total potential returns per unit of risk. Insignia Financial is currently generating about 0.1 per unit of volatility. If you would invest  219.00  in Insignia Financial on October 9, 2024 and sell it today you would earn a total of  191.00  from holding Insignia Financial or generate 87.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Maggie Beer Holdings  vs.  Insignia Financial

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 latest uncertain performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Insignia Financial

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Insignia Financial are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Insignia Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maggie Beer and Insignia Financial

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

The idea behind Maggie Beer Holdings and Insignia Financial 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.