Correlation Between Mayfair Gold and Modine Manufacturing

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

By analyzing existing cross correlation between Mayfair Gold Corp and Modine Manufacturing, you can compare the effects of market volatilities on Mayfair Gold and Modine Manufacturing 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 Mayfair Gold with a short position of Modine Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayfair Gold and Modine Manufacturing.

Diversification Opportunities for Mayfair Gold and Modine Manufacturing

-0.21

Correlation Coefficient

Mayfair Gold  Modine Manufacturing

Very good diversification

The 3 months correlation between Mayfair and Modine is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp and Modine Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modine Manufacturing and Mayfair Gold 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 Mayfair Gold Corp are associated (or correlated) with Modine Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modine Manufacturing has no effect on the direction of Mayfair Gold i.e., Mayfair Gold and Modine Manufacturing go up and down completely randomly.

Pair Corralation between Mayfair Gold and Modine Manufacturing

Assuming the 90 days horizon Mayfair Gold Corp is expected to under-perform the Modine Manufacturing. But the otc stock apears to be less risky and, when comparing its historical volatility, Mayfair Gold Corp is 1.57 times less risky than Modine Manufacturing. The otc stock trades about -0.12 of its potential returns per unit of risk. The Modine Manufacturing is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  13,279  in Modine Manufacturing on September 28, 2024 and sell it today you would lose (1,229) from holding Modine Manufacturing or give up 9.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Mayfair Gold Corp  vs.  Modine Manufacturing

Mayfair Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mayfair Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Modine Manufacturing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Modine Manufacturing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Modine Manufacturing is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Mayfair Gold and Modine Manufacturing

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

The idea behind Mayfair Gold Corp and Modine Manufacturing 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.