Correlation Between Computershare and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Computershare 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 Computershare and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computershare and Macquarie Bank Limited, you can compare the effects of market volatilities on Computershare 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 Computershare with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computershare and Macquarie Bank.
Diversification Opportunities for Computershare and Macquarie Bank
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Computershare and Macquarie is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Computershare and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Computershare 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 Computershare 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 Computershare i.e., Computershare and Macquarie Bank go up and down completely randomly.
Pair Corralation between Computershare and Macquarie Bank
Assuming the 90 days trading horizon Computershare is expected to generate 2.75 times more return on investment than Macquarie Bank. However, Computershare is 2.75 times more volatile than Macquarie Bank Limited. It trades about 0.5 of its potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.07 per unit of risk. If you would invest 2,622 in Computershare on September 2, 2024 and sell it today you would earn a total of 567.00 from holding Computershare or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computershare vs. Macquarie Bank Limited
Performance |
| Timeline |
| Computershare |
| Macquarie Bank |
Computershare and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computershare and Macquarie Bank
The main advantage of trading using opposite Computershare and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computershare 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.| Computershare vs. Clime Investment Management | Computershare vs. M3 Mining | Computershare vs. Platinum Asset Management | Computershare vs. Perseus Mining |
| Macquarie Bank vs. MFF Capital Investments | Macquarie Bank vs. Pinnacle Investment Management | Macquarie Bank vs. Regal Investment | Macquarie Bank vs. Truscott Mining Corp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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