Correlation Between Macquarie Technology and Minbos Resources
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Minbos Resources 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 Minbos Resources 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 Minbos Resources, you can compare the effects of market volatilities on Macquarie Technology and Minbos Resources 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 Minbos Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Minbos Resources.
Diversification Opportunities for Macquarie Technology and Minbos Resources
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macquarie and Minbos is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Minbos Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minbos Resources 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 Minbos Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minbos Resources has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Minbos Resources go up and down completely randomly.
Pair Corralation between Macquarie Technology and Minbos Resources
Assuming the 90 days trading horizon Macquarie Technology is expected to generate 1.22 times less return on investment than Minbos Resources. But when comparing it to its historical volatility, Macquarie Technology Group is 2.7 times less risky than Minbos Resources. It trades about 0.05 of its potential returns per unit of risk. Minbos Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9.20 in Minbos Resources on September 12, 2024 and sell it today you would lose (0.40) from holding Minbos Resources or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. Minbos Resources
Performance |
| Timeline |
| Macquarie Technology |
| Minbos Resources |
Macquarie Technology and Minbos Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Minbos Resources
The main advantage of trading using opposite Macquarie Technology and Minbos Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Minbos Resources 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 Minbos Resources will offset losses from the drop in Minbos Resources' long position.| Macquarie Technology vs. Aneka Tambang Tbk | Macquarie Technology vs. Macquarie Group | Macquarie Technology vs. Challenger | Macquarie Technology vs. BHP Group Limited |
| Minbos Resources vs. TPG Telecom | Minbos Resources vs. Computershare | Minbos Resources vs. Srj Technologies Group | Minbos Resources 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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