Correlation Between Insignia Financial and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both Insignia Financial 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 Insignia Financial and Macquarie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insignia Financial and Macquarie Group Ltd, you can compare the effects of market volatilities on Insignia Financial 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 Insignia Financial with a short position of Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and Macquarie Group.
Diversification Opportunities for Insignia Financial and Macquarie Group
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Insignia and Macquarie is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and Macquarie Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Insignia Financial 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 Insignia Financial 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 Insignia Financial i.e., Insignia Financial and Macquarie Group go up and down completely randomly.
Pair Corralation between Insignia Financial and Macquarie Group
Assuming the 90 days trading horizon Insignia Financial is expected to generate 18.91 times more return on investment than Macquarie Group. However, Insignia Financial is 18.91 times more volatile than Macquarie Group Ltd. It trades about 0.32 of its potential returns per unit of risk. Macquarie Group Ltd is currently generating about 0.15 per unit of risk. If you would invest 357.00 in Insignia Financial on October 25, 2024 and sell it today you would earn a total of 86.00 from holding Insignia Financial or generate 24.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insignia Financial vs. Macquarie Group Ltd
Performance |
| Timeline |
| Insignia Financial |
| Macquarie Group |
Insignia Financial and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insignia Financial and Macquarie Group
The main advantage of trading using opposite Insignia Financial and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia Financial 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.| Insignia Financial vs. DY6 Metals | Insignia Financial vs. Black Rock Mining | Insignia Financial vs. Truscott Mining Corp | Insignia Financial vs. Dalaroo Metals |
| Macquarie Group vs. K2 Asset Management | Macquarie Group vs. Microequities Asset Management | Macquarie Group vs. Sonic Healthcare | Macquarie Group vs. Australian Strategic Materials |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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