Correlation Between Iron Road and Macquarie
Can any of the company-specific risk be diversified away by investing in both Iron Road and Macquarie 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 Iron Road and Macquarie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Road and Macquarie Group, you can compare the effects of market volatilities on Iron Road and Macquarie 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 Iron Road with a short position of Macquarie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Road and Macquarie.
Diversification Opportunities for Iron Road and Macquarie
Very good diversification
The 3 months correlation between Iron and Macquarie is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Iron Road and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Iron Road 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 Iron Road are associated (or correlated) with Macquarie. 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 Iron Road i.e., Iron Road and Macquarie go up and down completely randomly.
Pair Corralation between Iron Road and Macquarie
Assuming the 90 days trading horizon Iron Road is expected to generate 2.01 times more return on investment than Macquarie. However, Iron Road is 2.01 times more volatile than Macquarie Group. It trades about 0.08 of its potential returns per unit of risk. Macquarie Group is currently generating about -0.09 per unit of risk. If you would invest 5.30 in Iron Road on November 28, 2024 and sell it today you would earn a total of 0.20 from holding Iron Road or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iron Road vs. Macquarie Group
Performance |
| Timeline |
| Iron Road |
| Macquarie Group |
Iron Road and Macquarie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iron Road and Macquarie
The main advantage of trading using opposite Iron Road and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Road position performs unexpectedly, Macquarie 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 will offset losses from the drop in Macquarie's long position.| Iron Road vs. Zoom2u Technologies | Iron Road vs. Thorney Technologies | Iron Road vs. Mach7 Technologies | Iron Road vs. Complii FinTech Solutions |
| Macquarie vs. DMC Mining | Macquarie vs. ACDC Metals | Macquarie vs. Dalaroo Metals | Macquarie vs. Sky 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |