Correlation Between Superior Plus and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Macquarie 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 Superior Plus and Macquarie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Macquarie Group Limited, you can compare the effects of market volatilities on Superior Plus and Macquarie 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 Superior Plus with a short position of Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Macquarie Group.
Diversification Opportunities for Superior Plus and Macquarie Group
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and Macquarie is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Macquarie Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Superior Plus 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 Superior Plus Corp are associated (or correlated) with Macquarie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Superior Plus i.e., Superior Plus and Macquarie Group go up and down completely randomly.
Pair Corralation between Superior Plus and Macquarie Group
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Macquarie Group. In addition to that, Superior Plus is 1.81 times more volatile than Macquarie Group Limited. It trades about -0.09 of its total potential returns per unit of risk. Macquarie Group Limited is currently generating about 0.11 per unit of volatility. If you would invest 11,530 in Macquarie Group Limited on August 25, 2024 and sell it today you would earn a total of 2,466 from holding Macquarie Group Limited or generate 21.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Macquarie Group Limited
Performance |
| Timeline |
| Superior Plus Corp |
| Macquarie Group |
Superior Plus and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Macquarie Group
The main advantage of trading using opposite Superior Plus and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Macquarie 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 Macquarie Group will offset losses from the drop in Macquarie Group's long position.| Superior Plus vs. Fast Retailing Co | Superior Plus vs. Auto Trader Group | Superior Plus vs. Monster Beverage Corp | Superior Plus vs. Suntory Beverage Food |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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