Correlation Between Mach7 Technologies and CSL
Can any of the company-specific risk be diversified away by investing in both Mach7 Technologies and CSL 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 Mach7 Technologies and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mach7 Technologies and CSL, you can compare the effects of market volatilities on Mach7 Technologies and CSL 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 Mach7 Technologies with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mach7 Technologies and CSL.
Diversification Opportunities for Mach7 Technologies and CSL
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mach7 and CSL is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mach7 Technologies and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL and Mach7 Technologies 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 Mach7 Technologies are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Mach7 Technologies i.e., Mach7 Technologies and CSL go up and down completely randomly.
Pair Corralation between Mach7 Technologies and CSL
Assuming the 90 days trading horizon Mach7 Technologies is expected to under-perform the CSL. In addition to that, Mach7 Technologies is 3.1 times more volatile than CSL. It trades about -0.22 of its total potential returns per unit of risk. CSL is currently generating about -0.11 per unit of volatility. If you would invest 28,666 in CSL on September 13, 2024 and sell it today you would lose (705.00) from holding CSL or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mach7 Technologies vs. CSL
Performance |
| Timeline |
| Mach7 Technologies |
| CSL |
Mach7 Technologies and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mach7 Technologies and CSL
The main advantage of trading using opposite Mach7 Technologies and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mach7 Technologies position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Mach7 Technologies vs. Insignia Financial | Mach7 Technologies vs. Bell Financial Group | Mach7 Technologies vs. Kkr Credit Income | Mach7 Technologies vs. Finexia Financial Group |
| CSL vs. Charter Hall Education | CSL vs. Ainsworth Game Technology | CSL vs. Advanced Braking Technology | CSL vs. Pinnacle Investment Management |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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