Correlation Between Harvest Technology and Macquarie Technology
Can any of the company-specific risk be diversified away by investing in both Harvest Technology 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 Harvest Technology and Macquarie Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harvest Technology Group and Macquarie Technology Group, you can compare the effects of market volatilities on Harvest Technology 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 Harvest Technology with a short position of Macquarie Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Technology and Macquarie Technology.
Diversification Opportunities for Harvest Technology and Macquarie Technology
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harvest and Macquarie is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Technology Group and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology and Harvest Technology 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 Harvest Technology Group 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 Harvest Technology i.e., Harvest Technology and Macquarie Technology go up and down completely randomly.
Pair Corralation between Harvest Technology and Macquarie Technology
Assuming the 90 days trading horizon Harvest Technology Group is expected to under-perform the Macquarie Technology. In addition to that, Harvest Technology is 5.23 times more volatile than Macquarie Technology Group. It trades about -0.09 of its total potential returns per unit of risk. Macquarie Technology Group is currently generating about -0.14 per unit of volatility. If you would invest 8,241 in Macquarie Technology Group on November 27, 2024 and sell it today you would lose (324.00) from holding Macquarie Technology Group or give up 3.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harvest Technology Group vs. Macquarie Technology Group
Performance |
| Timeline |
| Harvest Technology |
| Macquarie Technology |
Harvest Technology and Macquarie Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harvest Technology and Macquarie Technology
The main advantage of trading using opposite Harvest Technology and Macquarie Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Technology 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.| Harvest Technology vs. Autosports Group | Harvest Technology vs. Queste Communications | Harvest Technology vs. Sky Metals | Harvest Technology vs. Aussie Broadband |
| Macquarie Technology vs. Hansen Technologies | Macquarie Technology vs. Resonance Health | Macquarie Technology vs. Global Health | Macquarie Technology vs. Genetic Technologies |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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