Correlation Between Macquarie Technology and Sports Entertainment
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Sports 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 Sports 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 Sports Entertainment Group, you can compare the effects of market volatilities on Macquarie Technology and Sports 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 Sports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Sports Entertainment.
Diversification Opportunities for Macquarie Technology and Sports Entertainment
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Macquarie and Sports is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Sports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports 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 Sports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Entertainment has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Sports Entertainment go up and down completely randomly.
Pair Corralation between Macquarie Technology and Sports Entertainment
Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 0.27 times more return on investment than Sports Entertainment. However, Macquarie Technology Group is 3.74 times less risky than Sports Entertainment. It trades about -0.06 of its potential returns per unit of risk. Sports Entertainment Group is currently generating about -0.03 per unit of risk. If you would invest 8,659 in Macquarie Technology Group on October 28, 2024 and sell it today you would lose (138.00) from holding Macquarie Technology Group or give up 1.59% 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. Sports Entertainment Group
Performance |
| Timeline |
| Macquarie Technology |
| Sports Entertainment |
Macquarie Technology and Sports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Sports Entertainment
The main advantage of trading using opposite Macquarie Technology and Sports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Sports 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 Sports Entertainment will offset losses from the drop in Sports Entertainment's long position.| Macquarie Technology vs. Southern Cross Media | Macquarie Technology vs. Sports Entertainment Group | Macquarie Technology vs. Perseus Mining | Macquarie Technology vs. Truscott Mining Corp |
| Sports Entertainment vs. Macquarie Technology Group | Sports Entertainment vs. ACDC Metals | Sports Entertainment vs. Mach7 Technologies | Sports Entertainment vs. Thorney Technologies |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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