Correlation Between Macmahon Holdings and Sugarmade

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

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

Diversification Opportunities for Macmahon Holdings and Sugarmade

0.57

Correlation Coefficient

Macmahon Holdings  Sugarmade

Very weak diversification

The 3 months correlation between Macmahon and Sugarmade is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Macmahon Holdings Limited and Sugarmade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sugarmade and Macmahon Holdings 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 Macmahon Holdings Limited are associated (or correlated) with Sugarmade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sugarmade has no effect on the direction of Macmahon Holdings i.e., Macmahon Holdings and Sugarmade go up and down completely randomly.

Pair Corralation between Macmahon Holdings and Sugarmade

If you would invest  22.00  in Macmahon Holdings Limited on October 22, 2024 and sell it today you would earn a total of  0.00  from holding Macmahon Holdings Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	38.89%
Values	Daily Returns

Macmahon Holdings Limited  vs.  Sugarmade

Macmahon Holdings

Risk-Adjusted Performance

0 of 100

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 latest unfluctuating performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sugarmade

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Sugarmade has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather fragile primary indicators, Sugarmade exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Macmahon Holdings and Sugarmade

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

The idea behind Macmahon Holdings Limited and Sugarmade 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.