Correlation Between Acushnet Holdings and Madison Square

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

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

Diversification Opportunities for Acushnet Holdings and Madison Square

-0.73

Correlation Coefficient

Acushnet Holdings  Madison Square

Pay attention - limited upside

The 3 months correlation between Acushnet and Madison is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Acushnet Holdings Corp and Madison Square Garden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Square Garden and Acushnet 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 Acushnet Holdings Corp are associated (or correlated) with Madison Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Square Garden has no effect on the direction of Acushnet Holdings i.e., Acushnet Holdings and Madison Square go up and down completely randomly.

Pair Corralation between Acushnet Holdings and Madison Square

Given the investment horizon of 90 days Acushnet Holdings Corp is expected to generate 1.17 times more return on investment than Madison Square. However, Acushnet Holdings is 1.17 times more volatile than Madison Square Garden. It trades about 0.08 of its potential returns per unit of risk. Madison Square Garden is currently generating about -0.07 per unit of risk. If you would invest  6,605  in Acushnet Holdings Corp on August 31, 2024 and sell it today you would earn a total of  687.00  from holding Acushnet Holdings Corp or generate 10.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Acushnet Holdings Corp  vs.  Madison Square Garden

Acushnet Holdings Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Acushnet Holdings Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting essential indicators, Acushnet Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Madison Square Garden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Madison Square Garden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Acushnet Holdings and Madison Square

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

The idea behind Acushnet Holdings Corp and Madison Square Garden 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.