Correlation Between BTC Health and Macquarie Technology
Can any of the company-specific risk be diversified away by investing in both BTC Health and Macquarie Technology 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 BTC Health and Macquarie Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTC Health Limited and Macquarie Technology Group, you can compare the effects of market volatilities on BTC Health and Macquarie Technology 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 BTC Health with a short position of Macquarie Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Macquarie Technology.
Diversification Opportunities for BTC Health and Macquarie Technology
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BTC and Macquarie is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology and BTC Health 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 BTC Health Limited are associated (or correlated) with Macquarie Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Technology has no effect on the direction of BTC Health i.e., BTC Health and Macquarie Technology go up and down completely randomly.
Pair Corralation between BTC Health and Macquarie Technology
Assuming the 90 days trading horizon BTC Health Limited is expected to generate 2.96 times more return on investment than Macquarie Technology. However, BTC Health is 2.96 times more volatile than Macquarie Technology Group. It trades about 0.05 of its potential returns per unit of risk. Macquarie Technology Group is currently generating about 0.05 per unit of risk. If you would invest 3.70 in BTC Health Limited on September 24, 2024 and sell it today you would earn a total of 4.00 from holding BTC Health Limited or generate 108.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTC Health Limited vs. Macquarie Technology Group
Performance |
| Timeline |
| BTC Health Limited |
| Macquarie Technology |
BTC Health and Macquarie Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Health and Macquarie Technology
The main advantage of trading using opposite BTC Health and Macquarie Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Macquarie Technology 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 Technology will offset losses from the drop in Macquarie Technology's long position.The idea behind BTC Health Limited and Macquarie Technology Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Macquarie Technology vs. Hutchison Telecommunications | Macquarie Technology vs. Australian Unity Office | Macquarie Technology vs. Prime Financial Group | Macquarie Technology vs. Kkr Credit Income |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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