Correlation Between Mawer Global and Mawer Canadien

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

By analyzing existing cross correlation between Mawer Global Small and Mawer Canadien actions, you can compare the effects of market volatilities on Mawer Global and Mawer Canadien 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 Mawer Global with a short position of Mawer Canadien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mawer Global and Mawer Canadien.

Diversification Opportunities for Mawer Global and Mawer Canadien

-0.53

Correlation Coefficient

Mawer Global  Mawer Canadien

Excellent diversification

The 3 months correlation between Mawer and Mawer is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mawer Global Small and Mawer Canadien actions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawer Canadien actions and Mawer Global 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 Mawer Global Small are associated (or correlated) with Mawer Canadien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawer Canadien actions has no effect on the direction of Mawer Global i.e., Mawer Global and Mawer Canadien go up and down completely randomly.

Pair Corralation between Mawer Global and Mawer Canadien

Assuming the 90 days trading horizon Mawer Global Small is expected to under-perform the Mawer Canadien. In addition to that, Mawer Global is 1.67 times more volatile than Mawer Canadien actions. It trades about -0.05 of its total potential returns per unit of risk. Mawer Canadien actions is currently generating about 0.19 per unit of volatility. If you would invest  9,702  in Mawer Canadien actions on September 13, 2024 and sell it today you would earn a total of  548.00  from holding Mawer Canadien actions or generate 5.65% return on investment over 90 days.

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

Mawer Global Small  vs.  Mawer Canadien actions

Mawer Global Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mawer Global Small has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Mawer Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Mawer Canadien actions

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mawer Canadien actions are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Mawer Canadien is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mawer Global and Mawer Canadien

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

The idea behind Mawer Global Small and Mawer Canadien actions 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.