Correlation Between Global Data and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both Global Data and Macquarie Group 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 Global Data and Macquarie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Data Centre and Macquarie Group Ltd, you can compare the effects of market volatilities on Global Data and Macquarie Group 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 Global Data with a short position of Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Data and Macquarie Group.
Diversification Opportunities for Global Data and Macquarie Group
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Macquarie is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Global Data Centre and Macquarie Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Global Data 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 Global Data Centre are associated (or correlated) with Macquarie Group. 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 Global Data i.e., Global Data and Macquarie Group go up and down completely randomly.
Pair Corralation between Global Data and Macquarie Group
Assuming the 90 days trading horizon Global Data Centre is expected to under-perform the Macquarie Group. In addition to that, Global Data is 12.83 times more volatile than Macquarie Group Ltd. It trades about -0.11 of its total potential returns per unit of risk. Macquarie Group Ltd is currently generating about 0.05 per unit of volatility. If you would invest 10,298 in Macquarie Group Ltd on October 14, 2024 and sell it today you would earn a total of 122.00 from holding Macquarie Group Ltd or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Data Centre vs. Macquarie Group Ltd
Performance |
| Timeline |
| Global Data Centre |
| Macquarie Group |
Global Data and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Data and Macquarie Group
The main advantage of trading using opposite Global Data and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Data position performs unexpectedly, Macquarie Group 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 Group will offset losses from the drop in Macquarie Group's long position.| Global Data vs. Event Hospitality and | Global Data vs. Ambertech | Global Data vs. Epsilon Healthcare | Global Data vs. Ainsworth Game Technology |
| Macquarie Group vs. Skycity Entertainment Group | Macquarie Group vs. Sky Metals | Macquarie Group vs. Aurelia Metals | Macquarie Group vs. Infomedia |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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