Correlation Between Health and Macquarie Technology
Can any of the company-specific risk be diversified away by investing in both Health 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 Health and Macquarie Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health and Plant and Macquarie Technology Group, you can compare the effects of market volatilities on Health 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 Health with a short position of Macquarie Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health and Macquarie Technology.
Diversification Opportunities for Health and Macquarie Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Health and Macquarie is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Health and Plant and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology and Health 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 Health and Plant 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 Health i.e., Health and Macquarie Technology go up and down completely randomly.
Pair Corralation between Health and Macquarie Technology
Assuming the 90 days trading horizon Health and Plant is expected to under-perform the Macquarie Technology. But the stock apears to be less risky and, when comparing its historical volatility, Health and Plant is 1.3 times less risky than Macquarie Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Macquarie Technology Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,810 in Macquarie Technology Group on October 30, 2024 and sell it today you would earn a total of 2,711 from holding Macquarie Technology Group or generate 46.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health and Plant vs. Macquarie Technology Group
Performance |
| Timeline |
| Health and Plant |
| Macquarie Technology |
Health and Macquarie Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health and Macquarie Technology
The main advantage of trading using opposite Health and Macquarie Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health 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.| Health vs. oOhMedia | Health vs. Skycity Entertainment Group | Health vs. Collins Foods | Health vs. Perseus Mining |
| Macquarie Technology vs. Auswide Bank | Macquarie Technology vs. EROAD | Macquarie Technology vs. Qbe Insurance Group | Macquarie Technology vs. Group 6 Metals |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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