Correlation Between Centaurus Metals and Macquarie
Can any of the company-specific risk be diversified away by investing in both Centaurus Metals and Macquarie 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 Centaurus Metals and Macquarie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaurus Metals and Macquarie Group, you can compare the effects of market volatilities on Centaurus Metals and Macquarie 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 Centaurus Metals with a short position of Macquarie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and Macquarie.
Diversification Opportunities for Centaurus Metals and Macquarie
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centaurus and Macquarie is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Centaurus Metals 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 Centaurus Metals are associated (or correlated) with Macquarie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and Macquarie go up and down completely randomly.
Pair Corralation between Centaurus Metals and Macquarie
Assuming the 90 days trading horizon Centaurus Metals is expected to generate 6.7 times less return on investment than Macquarie. In addition to that, Centaurus Metals is 4.43 times more volatile than Macquarie Group. It trades about 0.0 of its total potential returns per unit of risk. Macquarie Group is currently generating about 0.14 per unit of volatility. If you would invest 15,419 in Macquarie Group on September 1, 2024 and sell it today you would earn a total of 7,692 from holding Macquarie Group or generate 49.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Centaurus Metals vs. Macquarie Group
Performance |
| Timeline |
| Centaurus Metals |
| Macquarie Group |
Centaurus Metals and Macquarie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaurus Metals and Macquarie
The main advantage of trading using opposite Centaurus Metals and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaurus Metals position performs unexpectedly, Macquarie 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 will offset losses from the drop in Macquarie's long position.| Centaurus Metals vs. Charter Hall Retail | Centaurus Metals vs. Kkr Credit Income | Centaurus Metals vs. Auswide Bank | Centaurus Metals vs. Commonwealth Bank of |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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