Correlation Between Macquarie Technology and FleetPartners
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and FleetPartners 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 FleetPartners 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 FleetPartners Group, you can compare the effects of market volatilities on Macquarie Technology and FleetPartners 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 FleetPartners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and FleetPartners.
Diversification Opportunities for Macquarie Technology and FleetPartners
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Macquarie and FleetPartners is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and FleetPartners Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FleetPartners 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 FleetPartners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FleetPartners Group has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and FleetPartners go up and down completely randomly.
Pair Corralation between Macquarie Technology and FleetPartners
Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 0.99 times more return on investment than FleetPartners. However, Macquarie Technology Group is 1.01 times less risky than FleetPartners. It trades about 0.0 of its potential returns per unit of risk. FleetPartners Group is currently generating about -0.04 per unit of risk. If you would invest 8,900 in Macquarie Technology Group on September 3, 2024 and sell it today you would lose (103.00) from holding Macquarie Technology Group or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. FleetPartners Group
Performance |
| Timeline |
| Macquarie Technology |
| FleetPartners Group |
Macquarie Technology and FleetPartners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and FleetPartners
The main advantage of trading using opposite Macquarie Technology and FleetPartners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, FleetPartners 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 FleetPartners will offset losses from the drop in FleetPartners' long position.| Macquarie Technology vs. Encounter Resources | Macquarie Technology vs. Tlou Energy | Macquarie Technology vs. Superior Resources | Macquarie Technology vs. Peel Mining |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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