Correlation Between Doman Building and Macmahon Holdings
Can any of the company-specific risk be diversified away by investing in both Doman Building and Macmahon 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 Doman Building and Macmahon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doman Building Materials and Macmahon Holdings Limited, you can compare the effects of market volatilities on Doman Building and Macmahon 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 Doman Building with a short position of Macmahon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doman Building and Macmahon Holdings.
Diversification Opportunities for Doman Building and Macmahon Holdings
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Doman and Macmahon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Doman Building Materials and Macmahon Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macmahon Holdings and Doman Building 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 Doman Building Materials are associated (or correlated) with Macmahon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macmahon Holdings has no effect on the direction of Doman Building i.e., Doman Building and Macmahon Holdings go up and down completely randomly.
Pair Corralation between Doman Building and Macmahon Holdings
Assuming the 90 days horizon Doman Building Materials is expected to under-perform the Macmahon Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Doman Building Materials is 2.83 times less risky than Macmahon Holdings. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Macmahon Holdings Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Macmahon Holdings Limited on September 2, 2025 and sell it today you would earn a total of 8.00 from holding Macmahon Holdings Limited or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doman Building Materials vs. Macmahon Holdings Limited
Performance |
| Timeline |
| Doman Building Materials |
| Macmahon Holdings |
Doman Building and Macmahon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doman Building and Macmahon Holdings
The main advantage of trading using opposite Doman Building and Macmahon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doman Building position performs unexpectedly, Macmahon 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 Macmahon Holdings will offset losses from the drop in Macmahon Holdings' long position.| Doman Building vs. BJs Wholesale Club | Doman Building vs. Robinsons Retail Holdings | Doman Building vs. Burlington Stores | Doman Building vs. Fast Retailing Co |
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Check out your portfolio center.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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