Correlation Between Argo Investments and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Argo Investments 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 Argo Investments and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Investments and Macquarie Bank Limited, you can compare the effects of market volatilities on Argo Investments 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 Argo Investments with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Investments and Macquarie Bank.
Diversification Opportunities for Argo Investments and Macquarie Bank
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Argo and Macquarie is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Argo Investments 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 Argo Investments 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 Argo Investments i.e., Argo Investments and Macquarie Bank go up and down completely randomly.
Pair Corralation between Argo Investments and Macquarie Bank
Assuming the 90 days trading horizon Argo Investments is expected to generate 1.69 times more return on investment than Macquarie Bank. However, Argo Investments is 1.69 times more volatile than Macquarie Bank Limited. It trades about 0.13 of its potential returns per unit of risk. Macquarie Bank Limited is currently generating about -0.03 per unit of risk. If you would invest 895.00 in Argo Investments on October 25, 2024 and sell it today you would earn a total of 12.00 from holding Argo Investments or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Investments vs. Macquarie Bank Limited
Performance |
| Timeline |
| Argo Investments |
| Macquarie Bank |
Argo Investments and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Investments and Macquarie Bank
The main advantage of trading using opposite Argo Investments and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Investments 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.| Argo Investments vs. Perpetual Credit Income | Argo Investments vs. Bank of Queensland | Argo Investments vs. Australian Agricultural | Argo Investments vs. Finexia Financial Group |
| Macquarie Bank vs. K2 Asset Management | Macquarie Bank vs. Platinum Asset Management | Macquarie Bank vs. Regal Funds Management | Macquarie Bank vs. Clime Investment Management |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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