Correlation Between Macquarie Technology and Legacy Iron
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Legacy Iron 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 Legacy Iron 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 Legacy Iron Ore, you can compare the effects of market volatilities on Macquarie Technology and Legacy Iron 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 Legacy Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Legacy Iron.
Diversification Opportunities for Macquarie Technology and Legacy Iron
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Macquarie and Legacy is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Legacy Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legacy Iron Ore 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 Legacy Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legacy Iron Ore has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Legacy Iron go up and down completely randomly.
Pair Corralation between Macquarie Technology and Legacy Iron
Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 0.31 times more return on investment than Legacy Iron. However, Macquarie Technology Group is 3.23 times less risky than Legacy Iron. It trades about -0.01 of its potential returns per unit of risk. Legacy Iron Ore is currently generating about -0.04 per unit of risk. If you would invest 8,643 in Macquarie Technology Group on October 26, 2024 and sell it today you would lose (83.00) from holding Macquarie Technology Group or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. Legacy Iron Ore
Performance |
| Timeline |
| Macquarie Technology |
| Legacy Iron Ore |
Macquarie Technology and Legacy Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Legacy Iron
The main advantage of trading using opposite Macquarie Technology and Legacy Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Legacy Iron 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 Legacy Iron will offset losses from the drop in Legacy Iron's long position.| Macquarie Technology vs. Aurelia Metals | Macquarie Technology vs. Dalaroo Metals | Macquarie Technology vs. Centuria Industrial Reit | Macquarie Technology vs. 29Metals |
| Legacy Iron vs. Autosports Group | Legacy Iron vs. Energy Technologies Limited | Legacy Iron vs. Genetic Technologies | Legacy Iron vs. Macquarie Technology 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance |