Correlation Between Pinnacle West and Macfarlane Group
Can any of the company-specific risk be diversified away by investing in both Pinnacle West and Macfarlane Group 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 Pinnacle West and Macfarlane Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle West Capital and Macfarlane Group PLC, you can compare the effects of market volatilities on Pinnacle West and Macfarlane Group 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 Pinnacle West with a short position of Macfarlane Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle West and Macfarlane Group.
Diversification Opportunities for Pinnacle West and Macfarlane Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pinnacle and Macfarlane is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle West Capital and Macfarlane Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macfarlane Group PLC and Pinnacle West 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 Pinnacle West Capital are associated (or correlated) with Macfarlane Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macfarlane Group PLC has no effect on the direction of Pinnacle West i.e., Pinnacle West and Macfarlane Group go up and down completely randomly.
Pair Corralation between Pinnacle West and Macfarlane Group
Assuming the 90 days trading horizon Pinnacle West Capital is expected to generate 0.74 times more return on investment than Macfarlane Group. However, Pinnacle West Capital is 1.35 times less risky than Macfarlane Group. It trades about 0.16 of its potential returns per unit of risk. Macfarlane Group PLC is currently generating about -0.06 per unit of risk. If you would invest 7,566 in Pinnacle West Capital on September 3, 2024 and sell it today you would earn a total of 1,837 from holding Pinnacle West Capital or generate 24.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Pinnacle West Capital vs. Macfarlane Group PLC
Performance |
| Timeline |
| Pinnacle West Capital |
| Macfarlane Group PLC |
Pinnacle West and Macfarlane Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle West and Macfarlane Group
The main advantage of trading using opposite Pinnacle West and Macfarlane Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle West position performs unexpectedly, Macfarlane Group 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 Macfarlane Group will offset losses from the drop in Macfarlane Group's long position.| Pinnacle West vs. SilverCrest Metals | Pinnacle West vs. Ross Stores | Pinnacle West vs. Capital Metals PLC | Pinnacle West vs. Home Depot |
| Macfarlane Group vs. Lundin Mining Corp | Macfarlane Group vs. Anglesey Mining | Macfarlane Group vs. Abingdon Health Plc | Macfarlane Group vs. Worldwide Healthcare Trust |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |