Correlation Between Judo Capital and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Judo Capital and Macquarie Bank 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 Judo Capital and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Judo Capital Holdings and Macquarie Bank Ltd, you can compare the effects of market volatilities on Judo Capital and Macquarie Bank 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 Judo Capital with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Judo Capital and Macquarie Bank.
Diversification Opportunities for Judo Capital and Macquarie Bank
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Judo and Macquarie is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Judo Capital Holdings and Macquarie Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Judo Capital 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 Judo Capital Holdings are associated (or correlated) with Macquarie Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Bank has no effect on the direction of Judo Capital i.e., Judo Capital and Macquarie Bank go up and down completely randomly.
Pair Corralation between Judo Capital and Macquarie Bank
Assuming the 90 days trading horizon Judo Capital Holdings is expected to generate 3.92 times more return on investment than Macquarie Bank. However, Judo Capital is 3.92 times more volatile than Macquarie Bank Ltd. It trades about 0.27 of its potential returns per unit of risk. Macquarie Bank Ltd is currently generating about 0.05 per unit of risk. If you would invest 185.00 in Judo Capital Holdings on August 31, 2024 and sell it today you would earn a total of 15.00 from holding Judo Capital Holdings or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Judo Capital Holdings vs. Macquarie Bank Ltd
Performance |
| Timeline |
| Judo Capital Holdings |
| Macquarie Bank |
Judo Capital and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Judo Capital and Macquarie Bank
The main advantage of trading using opposite Judo Capital and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Judo Capital position performs unexpectedly, Macquarie Bank 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 Bank will offset losses from the drop in Macquarie Bank's long position.| Judo Capital vs. GreenX Metals | Judo Capital vs. Strickland Metals | Judo Capital vs. Sky Metals | Judo Capital vs. Qbe Insurance Group |
| Macquarie Bank vs. Clime Investment Management | Macquarie Bank vs. Cleanaway Waste Management | Macquarie Bank vs. Carnegie Clean Energy | Macquarie Bank vs. Charter Hall Retail |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |