Correlation Between Priority Technology and Maiden Holdings

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

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

Diversification Opportunities for Priority Technology and Maiden Holdings

-0.54

Correlation Coefficient

Priority Technology  Maiden Holdings

Excellent diversification

The 3 months correlation between Priority and Maiden is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Priority Technology Holdings and Maiden Holdings North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings North and Priority Technology 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 Priority Technology Holdings are associated (or correlated) with Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings North has no effect on the direction of Priority Technology i.e., Priority Technology and Maiden Holdings go up and down completely randomly.

Pair Corralation between Priority Technology and Maiden Holdings

Given the investment horizon of 90 days Priority Technology Holdings is expected to generate 3.35 times more return on investment than Maiden Holdings. However, Priority Technology is 3.35 times more volatile than Maiden Holdings North. It trades about 0.29 of its potential returns per unit of risk. Maiden Holdings North is currently generating about 0.17 per unit of risk. If you would invest  919.00  in Priority Technology Holdings on October 8, 2024 and sell it today you would earn a total of  310.00  from holding Priority Technology Holdings or generate 33.73% return on investment over 90 days.

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

Priority Technology Holdings  vs.  Maiden Holdings North

Priority Technology

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Priority Technology Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, Priority Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Maiden Holdings North

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Maiden Holdings North are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Maiden Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Priority Technology and Maiden Holdings

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

The idea behind Priority Technology Holdings and Maiden Holdings North 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.