Correlation Between Macquarie Technology and Recce
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Recce 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 Recce 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 Recce, you can compare the effects of market volatilities on Macquarie Technology and Recce 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 Recce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Recce.
Diversification Opportunities for Macquarie Technology and Recce
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Recce is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Recce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recce 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 Recce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recce has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Recce go up and down completely randomly.
Pair Corralation between Macquarie Technology and Recce
Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 0.57 times more return on investment than Recce. However, Macquarie Technology Group is 1.76 times less risky than Recce. It trades about 0.02 of its potential returns per unit of risk. Recce is currently generating about -0.07 per unit of risk. If you would invest 8,550 in Macquarie Technology Group on September 3, 2024 and sell it today you would earn a total of 247.00 from holding Macquarie Technology Group or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. Recce
Performance |
| Timeline |
| Macquarie Technology |
| Recce |
Macquarie Technology and Recce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Recce
The main advantage of trading using opposite Macquarie Technology and Recce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Recce 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 Recce will offset losses from the drop in Recce's long position.| Macquarie Technology vs. Encounter Resources | Macquarie Technology vs. Tlou Energy | Macquarie Technology vs. Superior Resources | Macquarie Technology vs. Peel 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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