Correlation Between Macquarie Technology and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and AiMedia Technologies 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 Macquarie Technology and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Technology Group and AiMedia Technologies, you can compare the effects of market volatilities on Macquarie Technology and AiMedia Technologies 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 Macquarie Technology with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and AiMedia Technologies.
Diversification Opportunities for Macquarie Technology and AiMedia Technologies
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macquarie and AiMedia is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and Macquarie Technology 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 Macquarie Technology Group are associated (or correlated) with AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Macquarie Technology and AiMedia Technologies
Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 0.25 times more return on investment than AiMedia Technologies. However, Macquarie Technology Group is 3.97 times less risky than AiMedia Technologies. It trades about 0.17 of its potential returns per unit of risk. AiMedia Technologies is currently generating about -0.1 per unit of risk. If you would invest 8,240 in Macquarie Technology Group on August 30, 2024 and sell it today you would earn a total of 389.00 from holding Macquarie Technology Group or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. AiMedia Technologies
Performance |
| Timeline |
| Macquarie Technology |
| AiMedia Technologies |
Macquarie Technology and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and AiMedia Technologies
The main advantage of trading using opposite Macquarie Technology and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| Macquarie Technology vs. PVW Resources | Macquarie Technology vs. Woolworths | Macquarie Technology vs. Wesfarmers | Macquarie Technology vs. Coles Group |
| AiMedia Technologies vs. PVW Resources | AiMedia Technologies vs. Woolworths | AiMedia Technologies vs. Wesfarmers | AiMedia Technologies vs. Coles 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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