Correlation Between Macquarie Technology and Autosports

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Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Autosports 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 Autosports 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 Autosports Group, you can compare the effects of market volatilities on Macquarie Technology and Autosports 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 Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Autosports.

Diversification Opportunities for Macquarie Technology and Autosports

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Macquarie and Autosports is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group 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 Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Autosports go up and down completely randomly.

Pair Corralation between Macquarie Technology and Autosports

Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 0.93 times more return on investment than Autosports. However, Macquarie Technology Group is 1.07 times less risky than Autosports. It trades about 0.18 of its potential returns per unit of risk. Autosports Group is currently generating about -0.67 per unit of risk. If you would invest  8,054  in Macquarie Technology Group on August 29, 2024 and sell it today you would earn a total of  446.00  from holding Macquarie Technology Group or generate 5.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Macquarie Technology Group  vs.  Autosports Group

 Performance 
       Timeline  
Macquarie Technology 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Technology Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Macquarie Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Autosports Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Autosports Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Macquarie Technology and Autosports Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Macquarie Technology and Autosports

The main advantage of trading using opposite Macquarie Technology and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Autosports 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 Autosports will offset losses from the drop in Autosports' long position.
The idea behind Macquarie Technology Group and Autosports Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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