Correlation Between Alpha HPA and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Alpha HPA and Macquarie 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 Alpha HPA and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha HPA and Macquarie Bank Limited, you can compare the effects of market volatilities on Alpha HPA and Macquarie 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 Alpha HPA with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha HPA and Macquarie Bank.
Diversification Opportunities for Alpha HPA and Macquarie Bank
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Alpha and Macquarie is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Alpha HPA and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Alpha HPA 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 Alpha HPA are associated (or correlated) with Macquarie Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Bank has no effect on the direction of Alpha HPA i.e., Alpha HPA and Macquarie Bank go up and down completely randomly.
Pair Corralation between Alpha HPA and Macquarie Bank
Assuming the 90 days trading horizon Alpha HPA is expected to generate 6.6 times more return on investment than Macquarie Bank. However, Alpha HPA is 6.6 times more volatile than Macquarie Bank Limited. It trades about 0.09 of its potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.04 per unit of risk. If you would invest 83.00 in Alpha HPA on October 24, 2024 and sell it today you would earn a total of 3.00 from holding Alpha HPA or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Alpha HPA vs. Macquarie Bank Limited
Performance |
| Timeline |
| Alpha HPA |
| Macquarie Bank |
Alpha HPA and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha HPA and Macquarie Bank
The main advantage of trading using opposite Alpha HPA and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha HPA position performs unexpectedly, Macquarie 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 Macquarie Bank will offset losses from the drop in Macquarie Bank's long position.| Alpha HPA vs. Regis Healthcare | Alpha HPA vs. Pinnacle Investment Management | Alpha HPA vs. Sonic Healthcare | Alpha HPA vs. Hotel Property Investments |
| Macquarie Bank vs. Balkan Mining and | Macquarie Bank vs. Commonwealth Bank of | Macquarie Bank vs. Bell Financial Group | Macquarie Bank vs. Talisman Mining |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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