Correlation Between Macquarie Group and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and FLOW TRADERS 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 FLOW TRADERS 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 FLOW TRADERS LTD, you can compare the effects of market volatilities on Macquarie Group and FLOW TRADERS 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 FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and FLOW TRADERS.
Diversification Opportunities for Macquarie Group and FLOW TRADERS
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Macquarie and FLOW is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Limited and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of Macquarie Group i.e., Macquarie Group and FLOW TRADERS go up and down completely randomly.
Pair Corralation between Macquarie Group and FLOW TRADERS
Assuming the 90 days horizon Macquarie Group Limited is expected to generate 0.83 times more return on investment than FLOW TRADERS. However, Macquarie Group Limited is 1.2 times less risky than FLOW TRADERS. It trades about 0.05 of its potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.01 per unit of risk. If you would invest 10,280 in Macquarie Group Limited on August 25, 2024 and sell it today you would earn a total of 3,716 from holding Macquarie Group Limited or generate 36.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group Limited vs. FLOW TRADERS LTD
Performance |
| Timeline |
| Macquarie Group |
| FLOW TRADERS LTD |
Macquarie Group and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and FLOW TRADERS
The main advantage of trading using opposite Macquarie Group and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| Macquarie Group vs. Gruppo Mutuionline SpA | Macquarie Group vs. The Hanover Insurance | Macquarie Group vs. Insurance Australia Group | Macquarie Group vs. MUTUIONLINE |
| FLOW TRADERS vs. Insurance Australia Group | FLOW TRADERS vs. MACOM Technology Solutions | FLOW TRADERS vs. HANOVER INSURANCE | FLOW TRADERS vs. Reinsurance Group of |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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