Correlation Between SEVEN GROUP and Maggie Beer

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

By analyzing existing cross correlation between SEVEN GROUP HOLDINGS and Maggie Beer Holdings, you can compare the effects of market volatilities on SEVEN GROUP and Maggie Beer 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 SEVEN GROUP with a short position of Maggie Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEVEN GROUP and Maggie Beer.

Diversification Opportunities for SEVEN GROUP and Maggie Beer

-0.46

Correlation Coefficient

SEVEN GROUP  Maggie Beer

Very good diversification

The 3 months correlation between SEVEN and Maggie is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SEVEN GROUP HOLDINGS and Maggie Beer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maggie Beer Holdings and SEVEN GROUP 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 SEVEN GROUP HOLDINGS are associated (or correlated) with Maggie Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maggie Beer Holdings has no effect on the direction of SEVEN GROUP i.e., SEVEN GROUP and Maggie Beer go up and down completely randomly.

Pair Corralation between SEVEN GROUP and Maggie Beer

Assuming the 90 days trading horizon SEVEN GROUP HOLDINGS is expected to under-perform the Maggie Beer. But the stock apears to be less risky and, when comparing its historical volatility, SEVEN GROUP HOLDINGS is 2.83 times less risky than Maggie Beer. The stock trades about -0.27 of its potential returns per unit of risk. The Maggie Beer Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  5.50  in Maggie Beer Holdings on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Maggie Beer Holdings or generate 0.0% return on investment over 90 days.

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

SEVEN GROUP HOLDINGS  vs.  Maggie Beer Holdings

SEVEN GROUP HOLDINGS

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SEVEN GROUP HOLDINGS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, SEVEN GROUP may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Maggie Beer Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maggie Beer Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with SEVEN GROUP and Maggie Beer

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

The idea behind SEVEN GROUP HOLDINGS and Maggie Beer 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.