Correlation Between Duketon Mining and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Duketon Mining 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 Duketon Mining and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duketon Mining and Macquarie Bank Limited, you can compare the effects of market volatilities on Duketon Mining 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 Duketon Mining with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duketon Mining and Macquarie Bank.
Diversification Opportunities for Duketon Mining and Macquarie Bank
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Duketon and Macquarie is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Duketon Mining and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Duketon Mining 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 Duketon Mining 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 Duketon Mining i.e., Duketon Mining and Macquarie Bank go up and down completely randomly.
Pair Corralation between Duketon Mining and Macquarie Bank
Assuming the 90 days trading horizon Duketon Mining is expected to under-perform the Macquarie Bank. In addition to that, Duketon Mining is 10.0 times more volatile than Macquarie Bank Limited. It trades about -0.04 of its total potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.06 per unit of volatility. If you would invest 9,103 in Macquarie Bank Limited on October 14, 2024 and sell it today you would earn a total of 1,302 from holding Macquarie Bank Limited or generate 14.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duketon Mining vs. Macquarie Bank Limited
Performance |
| Timeline |
| Duketon Mining |
| Macquarie Bank |
Duketon Mining and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duketon Mining and Macquarie Bank
The main advantage of trading using opposite Duketon Mining and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duketon Mining 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.| Duketon Mining vs. A1 Investments Resources | Duketon Mining vs. Flagship Investments | Duketon Mining vs. Autosports Group | Duketon Mining vs. Seven West Media |
| Macquarie Bank vs. IDP Education | Macquarie Bank vs. Aussie Broadband | Macquarie Bank vs. Gold Road Resources | Macquarie Bank vs. Retail Food Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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