Correlation Between Macquarie Group and COMINTL BANK
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and COMINTL BANK 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 Macquarie Group and COMINTL BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group Limited and COMINTL BANK ADR1, you can compare the effects of market volatilities on Macquarie Group and COMINTL BANK 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 Macquarie Group with a short position of COMINTL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and COMINTL BANK.
Diversification Opportunities for Macquarie Group and COMINTL BANK
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Macquarie and COMINTL is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Limited and COMINTL BANK ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMINTL BANK ADR1 and Macquarie 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 Macquarie Group Limited are associated (or correlated) with COMINTL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMINTL BANK ADR1 has no effect on the direction of Macquarie Group i.e., Macquarie Group and COMINTL BANK go up and down completely randomly.
Pair Corralation between Macquarie Group and COMINTL BANK
Assuming the 90 days horizon Macquarie Group Limited is expected to under-perform the COMINTL BANK. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Group Limited is 1.07 times less risky than COMINTL BANK. The stock trades about -0.17 of its potential returns per unit of risk. The COMINTL BANK ADR1 is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 130.00 in COMINTL BANK ADR1 on September 13, 2024 and sell it today you would lose (4.00) from holding COMINTL BANK ADR1 or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group Limited vs. COMINTL BANK ADR1
Performance |
| Timeline |
| Macquarie Group |
| COMINTL BANK ADR1 |
Macquarie Group and COMINTL BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and COMINTL BANK
The main advantage of trading using opposite Macquarie Group and COMINTL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, COMINTL BANK 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 COMINTL BANK will offset losses from the drop in COMINTL BANK's long position.| Macquarie Group vs. DEVRY EDUCATION GRP | Macquarie Group vs. Tencent Music Entertainment | Macquarie Group vs. Perseus Mining Limited | Macquarie Group vs. Warner Music Group |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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