Correlation Between CBH and Macquariefirst
Can any of the company-specific risk be diversified away by investing in both CBH and Macquariefirst 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 CBH and Macquariefirst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBH and Macquariefirst Tr Global, you can compare the effects of market volatilities on CBH and Macquariefirst 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 CBH with a short position of Macquariefirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBH and Macquariefirst.
Diversification Opportunities for CBH and Macquariefirst
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CBH and Macquariefirst is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding CBH and Macquariefirst Tr Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquariefirst Tr Global and CBH 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 CBH are associated (or correlated) with Macquariefirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquariefirst Tr Global has no effect on the direction of CBH i.e., CBH and Macquariefirst go up and down completely randomly.
Pair Corralation between CBH and Macquariefirst
Considering the 90-day investment horizon CBH is expected to generate 1.75 times less return on investment than Macquariefirst. But when comparing it to its historical volatility, CBH is 1.88 times less risky than Macquariefirst. It trades about 0.07 of its potential returns per unit of risk. Macquariefirst Tr Global is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 693.00 in Macquariefirst Tr Global on September 4, 2024 and sell it today you would earn a total of 152.00 from holding Macquariefirst Tr Global or generate 21.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.67% |
| Values | Daily Returns |
CBH vs. Macquariefirst Tr Global
Performance |
| Timeline |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Macquariefirst Tr Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CBH and Macquariefirst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBH and Macquariefirst
The main advantage of trading using opposite CBH and Macquariefirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBH position performs unexpectedly, Macquariefirst 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 Macquariefirst will offset losses from the drop in Macquariefirst's long position.| CBH vs. Eaton Vance National | CBH vs. Invesco High Income | CBH vs. Blackrock Muniholdings Ny | CBH vs. Nuveen California Select |
| Macquariefirst vs. MFS High Yield | Macquariefirst vs. MFS Investment Grade | Macquariefirst vs. MFS Municipal Income | Macquariefirst vs. DTF Tax Free |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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