Correlation Between Macquarie Technology and OD6 Metals
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and OD6 Metals 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 OD6 Metals 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 OD6 Metals, you can compare the effects of market volatilities on Macquarie Technology and OD6 Metals 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 OD6 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and OD6 Metals.
Diversification Opportunities for Macquarie Technology and OD6 Metals
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Macquarie and OD6 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and OD6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OD6 Metals 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 OD6 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OD6 Metals has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and OD6 Metals go up and down completely randomly.
Pair Corralation between Macquarie Technology and OD6 Metals
Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 0.15 times more return on investment than OD6 Metals. However, Macquarie Technology Group is 6.82 times less risky than OD6 Metals. It trades about -0.18 of its potential returns per unit of risk. OD6 Metals is currently generating about -0.23 per unit of risk. If you would invest 9,015 in Macquarie Technology Group on September 12, 2024 and sell it today you would lose (432.00) from holding Macquarie Technology Group or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. OD6 Metals
Performance |
| Timeline |
| Macquarie Technology |
| OD6 Metals |
Macquarie Technology and OD6 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and OD6 Metals
The main advantage of trading using opposite Macquarie Technology and OD6 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, OD6 Metals 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 OD6 Metals will offset losses from the drop in OD6 Metals' long position.| Macquarie Technology vs. Aneka Tambang Tbk | Macquarie Technology vs. Macquarie Group | Macquarie Technology vs. Challenger | Macquarie Technology vs. BHP Group Limited |
| OD6 Metals vs. Thorney Technologies | OD6 Metals vs. Richmond Vanadium Technology | OD6 Metals vs. Nine Entertainment Co | OD6 Metals 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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