Correlation Between Black Cat and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Black Cat 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 Black Cat and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Cat Syndicate and Macquarie Bank Limited, you can compare the effects of market volatilities on Black Cat 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 Black Cat with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Cat and Macquarie Bank.
Diversification Opportunities for Black Cat and Macquarie Bank
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Black and Macquarie is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Black Cat Syndicate and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Black Cat 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 Black Cat Syndicate 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 Black Cat i.e., Black Cat and Macquarie Bank go up and down completely randomly.
Pair Corralation between Black Cat and Macquarie Bank
Assuming the 90 days trading horizon Black Cat Syndicate is expected to generate 12.01 times more return on investment than Macquarie Bank. However, Black Cat is 12.01 times more volatile than Macquarie Bank Limited. It trades about 0.04 of its potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.08 per unit of risk. If you would invest 53.00 in Black Cat Syndicate on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Black Cat Syndicate or generate 30.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Cat Syndicate vs. Macquarie Bank Limited
Performance |
| Timeline |
| Black Cat Syndicate |
| Macquarie Bank |
Black Cat and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Cat and Macquarie Bank
The main advantage of trading using opposite Black Cat and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Cat 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.| Black Cat vs. Duxton Broadacre Farms | Black Cat vs. Mirrabooka Investments | Black Cat vs. Australian United Investment | Black Cat vs. Clime Investment Management |
| Macquarie Bank vs. Richmond Vanadium Technology | Macquarie Bank vs. Navigator Global Investments | Macquarie Bank vs. Regal Investment | 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 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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