Correlation Between Macquarie Technology and Janison Education
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Janison Education 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 Janison Education 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 Janison Education Group, you can compare the effects of market volatilities on Macquarie Technology and Janison Education 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 Janison Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Janison Education.
Diversification Opportunities for Macquarie Technology and Janison Education
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Macquarie and Janison is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Janison Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janison Education 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 Janison Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janison Education has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Janison Education go up and down completely randomly.
Pair Corralation between Macquarie Technology and Janison Education
Assuming the 90 days trading horizon Macquarie Technology is expected to generate 1.33 times less return on investment than Janison Education. But when comparing it to its historical volatility, Macquarie Technology Group is 4.3 times less risky than Janison Education. It trades about 0.41 of its potential returns per unit of risk. Janison Education Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Janison Education Group on August 25, 2024 and sell it today you would earn a total of 3.00 from holding Janison Education Group or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Macquarie Technology Group vs. Janison Education Group
Performance |
| Timeline |
| Macquarie Technology |
| Janison Education |
Macquarie Technology and Janison Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Janison Education
The main advantage of trading using opposite Macquarie Technology and Janison Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Janison Education 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 Janison Education will offset losses from the drop in Janison Education's long position.| Macquarie Technology vs. National Australia Bank | Macquarie Technology vs. National Australia Bank | Macquarie Technology vs. Westpac Banking | Macquarie Technology vs. National Australia Bank |
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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 Stocks Directory module to find actively traded stocks across global markets.
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