Correlation Between Harley Davidson and Mcbc Holdings

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Can any of the company-specific risk be diversified away by investing in both Harley Davidson and Mcbc 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 Harley Davidson and Mcbc Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harley-Davidson and Mcbc Holdings, you can compare the effects of market volatilities on Harley Davidson and Mcbc 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 Harley Davidson with a short position of Mcbc Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harley Davidson and Mcbc Holdings.

Diversification Opportunities for Harley Davidson and Mcbc Holdings

  Correlation Coefficient

Very poor diversification

The 3 months correlation between Harley and Mcbc Holdings is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Harley-Davidson and Mcbc Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mcbc Holdings and Harley Davidson 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 Harley-Davidson are associated (or correlated) with Mcbc Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mcbc Holdings has no effect on the direction of Harley Davidson i.e., Harley Davidson and Mcbc Holdings go up and down completely randomly.

Pair Corralation between Harley Davidson and Mcbc Holdings

Considering the 90-day investment horizon Harley-Davidson is expected to generate 1.21 times more return on investment than Mcbc Holdings. However, Harley Davidson is 1.21 times more volatile than Mcbc Holdings. It trades about 0.06 of its potential returns per unit of risk. Mcbc Holdings is currently generating about 0.06 per unit of risk. If you would invest  3,527  in Harley-Davidson on May 12, 2022 and sell it today you would earn a total of  360.00  from holding Harley-Davidson or generate 10.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Harley-Davidson  vs.  Mcbc Holdings

 Performance (%) 
Harley Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Harley-Davidson are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Harley Davidson exhibited solid returns over the last few months and may actually be approaching a breakup point.

Harley Price Channel

Mcbc Holdings 
Mcbc Holdings Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Mcbc Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Mcbc Holdings may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Mcbc Holdings Price Channel

Harley Davidson and Mcbc Holdings Volatility Contrast

   Predicted Return Density   

Pair Trading with Harley Davidson and Mcbc Holdings

The main advantage of trading using opposite Harley Davidson and Mcbc Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harley Davidson position performs unexpectedly, Mcbc 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 Mcbc Holdings will offset losses from the drop in Mcbc Holdings' long position.
The idea behind Harley-Davidson and Mcbc 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.
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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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