Correlation Between Carnegie Clean and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean 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 Carnegie Clean and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnegie Clean Energy and Macquarie Bank Ltd, you can compare the effects of market volatilities on Carnegie Clean 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 Carnegie Clean with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Macquarie Bank.
Diversification Opportunities for Carnegie Clean and Macquarie Bank
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Carnegie and Macquarie is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Macquarie Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Carnegie Clean 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 Carnegie Clean Energy 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 Carnegie Clean i.e., Carnegie Clean and Macquarie Bank go up and down completely randomly.
Pair Corralation between Carnegie Clean and Macquarie Bank
Assuming the 90 days trading horizon Carnegie Clean Energy is expected to generate 81.78 times more return on investment than Macquarie Bank. However, Carnegie Clean is 81.78 times more volatile than Macquarie Bank Ltd. It trades about 0.1 of its potential returns per unit of risk. Macquarie Bank Ltd is currently generating about 0.07 per unit of risk. If you would invest 10.00 in Carnegie Clean Energy on September 3, 2024 and sell it today you would lose (6.10) from holding Carnegie Clean Energy or give up 61.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnegie Clean Energy vs. Macquarie Bank Ltd
Performance |
| Timeline |
| Carnegie Clean Energy |
| Macquarie Bank |
Carnegie Clean and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and Macquarie Bank
The main advantage of trading using opposite Carnegie Clean and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean 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.| Carnegie Clean vs. Andean Silver Limited | Carnegie Clean vs. Australian Unity Office | Carnegie Clean vs. Hotel Property Investments | Carnegie Clean vs. Evolution Mining |
| Macquarie Bank vs. COAST ENTERTAINMENT HOLDINGS | Macquarie Bank vs. Skycity Entertainment Group | Macquarie Bank vs. MetalsGrove Mining | Macquarie Bank vs. Ora Banda 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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