Correlation Between Ladenburg Thalmann and Maiden Holdings

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

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

Diversification Opportunities for Ladenburg Thalmann and Maiden Holdings

-0.03

Correlation Coefficient

Ladenburg Thalmann  Maiden Holdings

Good diversification

The 3 months correlation between Ladenburg and Maiden is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ladenburg Thalmann Financial 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 Ladenburg Thalmann 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 Ladenburg Thalmann Financial 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 Ladenburg Thalmann i.e., Ladenburg Thalmann and Maiden Holdings go up and down completely randomly.

Pair Corralation between Ladenburg Thalmann and Maiden Holdings

Given the investment horizon of 90 days Ladenburg Thalmann Financial is expected to generate 1.91 times more return on investment than Maiden Holdings. However, Ladenburg Thalmann is 1.91 times more volatile than Maiden Holdings North. It trades about 0.02 of its potential returns per unit of risk. Maiden Holdings North is currently generating about 0.02 per unit of risk. If you would invest  1,750  in Ladenburg Thalmann Financial on September 18, 2024 and sell it today you would lose (40.00) from holding Ladenburg Thalmann Financial or give up 2.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	29.01%
Values	Daily Returns

Ladenburg Thalmann Financial  vs.  Maiden Holdings North

Ladenburg Thalmann

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ladenburg Thalmann Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ladenburg Thalmann is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Maiden Holdings North

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maiden Holdings North has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic 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 Ladenburg Thalmann and Maiden Holdings

The main advantage of trading using opposite Ladenburg Thalmann and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ladenburg Thalmann 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 Ladenburg Thalmann Financial 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.