Correlation Between Macquarie Technology and Flagship Investments
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Flagship Investments 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 Flagship Investments 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 Flagship Investments, you can compare the effects of market volatilities on Macquarie Technology and Flagship Investments 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 Flagship Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Flagship Investments.
Diversification Opportunities for Macquarie Technology and Flagship Investments
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Macquarie and Flagship is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Flagship Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagship Investments 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 Flagship Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagship Investments has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Flagship Investments go up and down completely randomly.
Pair Corralation between Macquarie Technology and Flagship Investments
Assuming the 90 days trading horizon Macquarie Technology is expected to generate 1.15 times less return on investment than Flagship Investments. In addition to that, Macquarie Technology is 1.31 times more volatile than Flagship Investments. It trades about 0.04 of its total potential returns per unit of risk. Flagship Investments is currently generating about 0.06 per unit of volatility. If you would invest 170.00 in Flagship Investments on September 12, 2024 and sell it today you would earn a total of 50.00 from holding Flagship Investments or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. Flagship Investments
Performance |
| Timeline |
| Macquarie Technology |
| Flagship Investments |
Macquarie Technology and Flagship Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Flagship Investments
The main advantage of trading using opposite Macquarie Technology and Flagship Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Flagship Investments 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 Flagship Investments will offset losses from the drop in Flagship Investments' long position.| Macquarie Technology vs. Aneka Tambang Tbk | Macquarie Technology vs. Macquarie Group | Macquarie Technology vs. Challenger | Macquarie Technology vs. BHP Group Limited |
| Flagship Investments vs. MetalsGrove Mining | Flagship Investments vs. Perseus Mining | Flagship Investments vs. Retail Food Group | Flagship Investments vs. Infomedia |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |