Correlation Between Macquarie Technology and Harvest Technology
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Harvest Technology 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 Harvest Technology 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 Harvest Technology Group, you can compare the effects of market volatilities on Macquarie Technology and Harvest Technology 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 Harvest Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Harvest Technology.
Diversification Opportunities for Macquarie Technology and Harvest Technology
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macquarie and Harvest is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Harvest Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Technology 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 Harvest Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Technology has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Harvest Technology go up and down completely randomly.
Pair Corralation between Macquarie Technology and Harvest Technology
Assuming the 90 days trading horizon Macquarie Technology is expected to generate 10.92 times less return on investment than Harvest Technology. But when comparing it to its historical volatility, Macquarie Technology Group is 7.77 times less risky than Harvest Technology. It trades about 0.18 of its potential returns per unit of risk. Harvest Technology Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1.40 in Harvest Technology Group on August 29, 2024 and sell it today you would earn a total of 0.90 from holding Harvest Technology Group or generate 64.29% 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. Harvest Technology Group
Performance |
| Timeline |
| Macquarie Technology |
| Harvest Technology |
Macquarie Technology and Harvest Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Harvest Technology
The main advantage of trading using opposite Macquarie Technology and Harvest Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Harvest Technology 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 Harvest Technology will offset losses from the drop in Harvest Technology's long position.| Macquarie Technology vs. PVW Resources | Macquarie Technology vs. Woolworths | Macquarie Technology vs. Wesfarmers | Macquarie Technology vs. Coles Group |
| Harvest Technology vs. PVW Resources | Harvest Technology vs. Woolworths | Harvest Technology vs. Wesfarmers | Harvest Technology 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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