Correlation Between Andean Silver and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Andean Silver 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 Andean Silver and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andean Silver Limited and Macquarie Bank Limited, you can compare the effects of market volatilities on Andean Silver 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 Andean Silver with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andean Silver and Macquarie Bank.
Diversification Opportunities for Andean Silver and Macquarie Bank
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Andean and Macquarie is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Andean Silver Limited and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Andean Silver 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 Andean Silver Limited 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 Andean Silver i.e., Andean Silver and Macquarie Bank go up and down completely randomly.
Pair Corralation between Andean Silver and Macquarie Bank
Assuming the 90 days trading horizon Andean Silver Limited is expected to under-perform the Macquarie Bank. In addition to that, Andean Silver is 5.69 times more volatile than Macquarie Bank Limited. It trades about -0.28 of its total potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.08 per unit of volatility. If you would invest 10,241 in Macquarie Bank Limited on September 25, 2024 and sell it today you would earn a total of 109.00 from holding Macquarie Bank Limited or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Andean Silver Limited vs. Macquarie Bank Limited
Performance |
| Timeline |
| Andean Silver Limited |
| Macquarie Bank |
Andean Silver and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andean Silver and Macquarie Bank
The main advantage of trading using opposite Andean Silver and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andean Silver 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.| Andean Silver vs. Prime Financial Group | Andean Silver vs. Latitude Financial Services | Andean Silver vs. Change Financial Limited | Andean Silver vs. Liberty Financial Group |
| Macquarie Bank vs. Black Rock Mining | Macquarie Bank vs. Duketon Mining | Macquarie Bank vs. Andean Silver Limited | Macquarie Bank vs. Perseus 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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