Correlation Between Maui Land and Fathom Holdings

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

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

Diversification Opportunities for Maui Land and Fathom Holdings

0.75

Correlation Coefficient

Maui Land  Fathom Holdings

Poor diversification

The 3 months correlation between Maui and Fathom is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Maui Land Pineapple and Fathom Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fathom Holdings and Maui Land 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 Maui Land Pineapple are associated (or correlated) with Fathom Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fathom Holdings has no effect on the direction of Maui Land i.e., Maui Land and Fathom Holdings go up and down completely randomly.

Pair Corralation between Maui Land and Fathom Holdings

Considering the 90-day investment horizon Maui Land Pineapple is expected to generate 0.47 times more return on investment than Fathom Holdings. However, Maui Land Pineapple is 2.12 times less risky than Fathom Holdings. It trades about -0.12 of its potential returns per unit of risk. Fathom Holdings is currently generating about -0.15 per unit of risk. If you would invest  2,187  in Maui Land Pineapple on December 27, 2024 and sell it today you would lose (356.00) from holding Maui Land Pineapple or give up 16.28% of portfolio value over 90 days.

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

Maui Land Pineapple  vs.  Fathom Holdings

Maui Land Pineapple

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maui Land Pineapple has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Fathom Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fathom Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Maui Land and Fathom Holdings

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

The idea behind Maui Land Pineapple and Fathom Holdings 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 Global Correlations module to find global opportunities by holding instruments from different markets.