Correlation Between Macquarie Technology and OAR Resources
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and OAR 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 OAR 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 OAR Resources, you can compare the effects of market volatilities on Macquarie Technology and OAR 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 OAR Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and OAR Resources.
Diversification Opportunities for Macquarie Technology and OAR Resources
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and OAR is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and OAR Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAR 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 OAR Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAR Resources has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and OAR Resources go up and down completely randomly.
Pair Corralation between Macquarie Technology and OAR Resources
Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the OAR Resources. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Technology Group is 9.81 times less risky than OAR Resources. The stock trades about -0.03 of its potential returns per unit of risk. The OAR Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.00 in OAR Resources on October 18, 2024 and sell it today you would lose (1.90) from holding OAR Resources or give up 47.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Macquarie Technology Group vs. OAR Resources
Performance |
| Timeline |
| Macquarie Technology |
| OAR Resources |
Macquarie Technology and OAR Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and OAR Resources
The main advantage of trading using opposite Macquarie Technology and OAR Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, OAR 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 OAR Resources will offset losses from the drop in OAR Resources' long position.| Macquarie Technology vs. Perpetual Credit Income | Macquarie Technology vs. Aussie Broadband | Macquarie Technology vs. Insignia Financial | Macquarie Technology vs. COG Financial Services |
| OAR Resources vs. Perseus Mining | OAR Resources vs. Aeon Metals | OAR Resources vs. Aurelia Metals | OAR Resources vs. MetalsGrove Mining |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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