Correlation Between Macquarie Technology and Ashley Services
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Ashley Services 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 Ashley Services 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 Ashley Services Group, you can compare the effects of market volatilities on Macquarie Technology and Ashley Services 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 Ashley Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Ashley Services.
Diversification Opportunities for Macquarie Technology and Ashley Services
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Macquarie and Ashley is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Ashley Services Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashley Services 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 Ashley Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashley Services Group has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Ashley Services go up and down completely randomly.
Pair Corralation between Macquarie Technology and Ashley Services
Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the Ashley Services. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Technology Group is 2.22 times less risky than Ashley Services. The stock trades about -0.12 of its potential returns per unit of risk. The Ashley Services Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Ashley Services Group on November 4, 2024 and sell it today you would earn a total of 1.00 from holding Ashley Services Group or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. Ashley Services Group
Performance |
| Timeline |
| Macquarie Technology |
| Ashley Services Group |
Macquarie Technology and Ashley Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Ashley Services
The main advantage of trading using opposite Macquarie Technology and Ashley Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Ashley Services 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 Ashley Services will offset losses from the drop in Ashley Services' long position.| Macquarie Technology vs. Aspire Mining | Macquarie Technology vs. Bell Financial Group | Macquarie Technology vs. Qbe Insurance Group | Macquarie Technology vs. Hutchison Telecommunications |
| Ashley Services vs. Diversified United Investment | Ashley Services vs. Queste Communications | Ashley Services vs. Hudson Investment Group | Ashley Services vs. Dexus Convenience Retail |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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