Correlation Between MA Financial and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both MA 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 MA 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 MA Financial Group and Macquarie Group Ltd, you can compare the effects of market volatilities on MA 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 MA Financial with a short position of Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MA Financial and Macquarie Group.
Diversification Opportunities for MA Financial and Macquarie Group
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MAF and Macquarie is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding MA Financial Group and Macquarie Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and MA 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 MA Financial Group 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 MA Financial i.e., MA Financial and Macquarie Group go up and down completely randomly.
Pair Corralation between MA Financial and Macquarie Group
Assuming the 90 days trading horizon MA Financial Group is expected to generate 5.96 times more return on investment than Macquarie Group. However, MA Financial is 5.96 times more volatile than Macquarie Group Ltd. It trades about 0.05 of its potential returns per unit of risk. Macquarie Group Ltd is currently generating about 0.06 per unit of risk. If you would invest 403.00 in MA Financial Group on September 13, 2024 and sell it today you would earn a total of 197.00 from holding MA Financial Group or generate 48.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MA Financial Group vs. Macquarie Group Ltd
Performance |
| Timeline |
| MA Financial Group |
| Macquarie Group |
MA Financial and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MA Financial and Macquarie Group
The main advantage of trading using opposite MA Financial and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MA 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.| MA Financial vs. Westpac Banking | MA Financial vs. National Australia Bank | MA Financial vs. National Australia Bank | MA Financial vs. National Australia Bank |
| Macquarie Group vs. MA Financial Group | Macquarie Group vs. Kkr Credit Income | Macquarie Group vs. ABACUS STORAGE KING | Macquarie Group vs. Bell Financial Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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