Correlation Between Hawsons Iron and Macquarie Technology
Can any of the company-specific risk be diversified away by investing in both Hawsons Iron and Macquarie Technology 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 Hawsons Iron and Macquarie Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawsons Iron and Macquarie Technology Group, you can compare the effects of market volatilities on Hawsons Iron and Macquarie Technology 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 Hawsons Iron with a short position of Macquarie Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawsons Iron and Macquarie Technology.
Diversification Opportunities for Hawsons Iron and Macquarie Technology
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hawsons and Macquarie is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hawsons Iron and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology and Hawsons Iron 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 Hawsons Iron are associated (or correlated) with Macquarie Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Technology has no effect on the direction of Hawsons Iron i.e., Hawsons Iron and Macquarie Technology go up and down completely randomly.
Pair Corralation between Hawsons Iron and Macquarie Technology
Assuming the 90 days trading horizon Hawsons Iron is expected to under-perform the Macquarie Technology. In addition to that, Hawsons Iron is 4.0 times more volatile than Macquarie Technology Group. It trades about -0.02 of its total potential returns per unit of risk. Macquarie Technology Group is currently generating about 0.24 per unit of volatility. If you would invest 8,257 in Macquarie Technology Group on September 1, 2024 and sell it today you would earn a total of 540.00 from holding Macquarie Technology Group or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawsons Iron vs. Macquarie Technology Group
Performance |
| Timeline |
| Hawsons Iron |
| Macquarie Technology |
Hawsons Iron and Macquarie Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawsons Iron and Macquarie Technology
The main advantage of trading using opposite Hawsons Iron and Macquarie Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawsons Iron position performs unexpectedly, Macquarie Technology 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 Technology will offset losses from the drop in Macquarie Technology's long position.| Hawsons Iron vs. Northern Star Resources | Hawsons Iron vs. Evolution Mining | Hawsons Iron vs. Bluescope Steel | Hawsons Iron vs. Sandfire Resources NL |
| Macquarie Technology vs. National Australia Bank | Macquarie Technology vs. Westpac Banking | Macquarie Technology vs. National Australia Bank | Macquarie Technology vs. Commonwealth Bank of |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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