Correlation Between Land Homes and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Land Homes 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 Land Homes and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Land Homes Group and Macquarie Bank Limited, you can compare the effects of market volatilities on Land Homes 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 Land Homes with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Land Homes and Macquarie Bank.
Diversification Opportunities for Land Homes and Macquarie Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Land and Macquarie is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Land Homes Group and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Land Homes 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 Land Homes Group 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 Land Homes i.e., Land Homes and Macquarie Bank go up and down completely randomly.
Pair Corralation between Land Homes and Macquarie Bank
Assuming the 90 days trading horizon Land Homes Group is expected to under-perform the Macquarie Bank. In addition to that, Land Homes is 3.03 times more volatile than Macquarie Bank Limited. It trades about -0.11 of its total potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.08 per unit of volatility. If you would invest 9,491 in Macquarie Bank Limited on August 25, 2024 and sell it today you would earn a total of 783.00 from holding Macquarie Bank Limited or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Land Homes Group vs. Macquarie Bank Limited
Performance |
| Timeline |
| Land Homes Group |
| Macquarie Bank |
Land Homes and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Land Homes and Macquarie Bank
The main advantage of trading using opposite Land Homes and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Land Homes 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.| Land Homes vs. Autosports Group | Land Homes vs. Credit Clear | Land Homes vs. Aristocrat Leisure | Land Homes vs. EP Financial Group |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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