Correlation Between Macquarie Technology and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Nine Entertainment 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 Nine Entertainment 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 Nine Entertainment Co, you can compare the effects of market volatilities on Macquarie Technology and Nine Entertainment 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 Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Nine Entertainment.
Diversification Opportunities for Macquarie Technology and Nine Entertainment
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Nine is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment 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 Nine Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Entertainment has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Nine Entertainment go up and down completely randomly.
Pair Corralation between Macquarie Technology and Nine Entertainment
Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 1.07 times more return on investment than Nine Entertainment. However, Macquarie Technology is 1.07 times more volatile than Nine Entertainment Co. It trades about 0.07 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about -0.07 per unit of risk. If you would invest 6,440 in Macquarie Technology Group on September 1, 2024 and sell it today you would earn a total of 2,357 from holding Macquarie Technology Group or generate 36.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. Nine Entertainment Co
Performance |
| Timeline |
| Macquarie Technology |
| Nine Entertainment |
Macquarie Technology and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Nine Entertainment
The main advantage of trading using opposite Macquarie Technology and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Nine Entertainment 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 Nine Entertainment will offset losses from the drop in Nine Entertainment's long position.| Macquarie Technology vs. National Australia Bank | Macquarie Technology vs. Westpac Banking | Macquarie Technology vs. National Australia Bank | Macquarie Technology vs. Commonwealth Bank of |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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