Correlation Between Maggie Beer and Neurotech International

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

Diversification Opportunities for Maggie Beer and Neurotech International

-0.46

Correlation Coefficient

Maggie Beer  Neurotech International

Very good diversification

The 3 months correlation between Maggie and Neurotech is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Maggie Beer Holdings and Neurotech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neurotech International 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 Neurotech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neurotech International has no effect on the direction of Maggie Beer i.e., Maggie Beer and Neurotech International go up and down completely randomly.

Pair Corralation between Maggie Beer and Neurotech International

Assuming the 90 days trading horizon Maggie Beer Holdings is expected to under-perform the Neurotech International. In addition to that, Maggie Beer is 1.15 times more volatile than Neurotech International. It trades about -0.02 of its total potential returns per unit of risk. Neurotech International is currently generating about 0.02 per unit of volatility. If you would invest  6.60  in Neurotech International on September 26, 2024 and sell it today you would lose (1.00) from holding Neurotech International or give up 15.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.58%
Values	Daily Returns

Maggie Beer Holdings  vs.  Neurotech International

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.

Neurotech International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neurotech International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Neurotech International 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 Neurotech International

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

The idea behind Maggie Beer Holdings and Neurotech International 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.