Correlation Between Autosports and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Autosports 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 Autosports and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and Macquarie Bank Limited, you can compare the effects of market volatilities on Autosports 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 Autosports with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and Macquarie Bank.
Diversification Opportunities for Autosports and Macquarie Bank
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Autosports and Macquarie is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Autosports 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 Autosports Group 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 Autosports i.e., Autosports and Macquarie Bank go up and down completely randomly.
Pair Corralation between Autosports and Macquarie Bank
Assuming the 90 days trading horizon Autosports is expected to generate 3.97 times less return on investment than Macquarie Bank. In addition to that, Autosports is 3.97 times more volatile than Macquarie Bank Limited. It trades about 0.0 of its total potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.06 per unit of volatility. If you would invest 9,031 in Macquarie Bank Limited on November 6, 2024 and sell it today you would earn a total of 1,368 from holding Macquarie Bank Limited or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autosports Group vs. Macquarie Bank Limited
Performance |
| Timeline |
| Autosports Group |
| Macquarie Bank |
Autosports and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autosports and Macquarie Bank
The main advantage of trading using opposite Autosports and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports 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.| Autosports vs. Aneka Tambang Tbk | Autosports vs. Commonwealth Bank of | Autosports vs. Commonwealth Bank of | Autosports vs. Commonwealth Bank of |
| Macquarie Bank vs. Sun Silver Limited | Macquarie Bank vs. Zoom2u Technologies | Macquarie Bank vs. Perseus Mining | Macquarie Bank vs. Ainsworth Game Technology |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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