Correlation Between Advanced Braking and Macquarie
Can any of the company-specific risk be diversified away by investing in both Advanced Braking and Macquarie 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 Advanced Braking and Macquarie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Braking Technology and Macquarie Group, you can compare the effects of market volatilities on Advanced Braking and Macquarie 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 Advanced Braking with a short position of Macquarie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Braking and Macquarie.
Diversification Opportunities for Advanced Braking and Macquarie
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advanced and Macquarie is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Braking Technology and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Advanced Braking 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 Advanced Braking Technology are associated (or correlated) with Macquarie. 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 Advanced Braking i.e., Advanced Braking and Macquarie go up and down completely randomly.
Pair Corralation between Advanced Braking and Macquarie
Assuming the 90 days trading horizon Advanced Braking Technology is expected to generate 1.86 times more return on investment than Macquarie. However, Advanced Braking is 1.86 times more volatile than Macquarie Group. It trades about 0.23 of its potential returns per unit of risk. Macquarie Group is currently generating about 0.25 per unit of risk. If you would invest 8.10 in Advanced Braking Technology on October 26, 2024 and sell it today you would earn a total of 0.90 from holding Advanced Braking Technology or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Advanced Braking Technology vs. Macquarie Group
Performance |
| Timeline |
| Advanced Braking Tec |
| Macquarie Group |
Advanced Braking and Macquarie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Braking and Macquarie
The main advantage of trading using opposite Advanced Braking and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Braking position performs unexpectedly, Macquarie 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 will offset losses from the drop in Macquarie's long position.| Advanced Braking vs. Carawine Resources Limited | Advanced Braking vs. Home Consortium | Advanced Braking vs. Ainsworth Game Technology | Advanced Braking vs. Mach7 Technologies |
| Macquarie vs. Advanced Braking Technology | Macquarie vs. Mach7 Technologies | Macquarie vs. Dug Technology | Macquarie vs. Anteris Technologies |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |