Correlation Between Macquarie Technology and Sandon Capital
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Sandon Capital 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 Sandon Capital 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 Sandon Capital Investments, you can compare the effects of market volatilities on Macquarie Technology and Sandon Capital 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 Sandon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Sandon Capital.
Diversification Opportunities for Macquarie Technology and Sandon Capital
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Sandon is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Sandon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandon Capital Inves 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 Sandon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandon Capital Inves has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Sandon Capital go up and down completely randomly.
Pair Corralation between Macquarie Technology and Sandon Capital
Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the Sandon Capital. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Technology Group is 1.24 times less risky than Sandon Capital. The stock trades about -0.01 of its potential returns per unit of risk. The Sandon Capital Investments is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 78.00 in Sandon Capital Investments on October 26, 2024 and sell it today you would earn a total of 3.00 from holding Sandon Capital Investments or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.12% |
| Values | Daily Returns |
Macquarie Technology Group vs. Sandon Capital Investments
Performance |
| Timeline |
| Macquarie Technology |
| Sandon Capital Inves |
Macquarie Technology and Sandon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Sandon Capital
The main advantage of trading using opposite Macquarie Technology and Sandon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Sandon Capital 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 Sandon Capital will offset losses from the drop in Sandon Capital's long position.| Macquarie Technology vs. Aurelia Metals | Macquarie Technology vs. Dalaroo Metals | Macquarie Technology vs. Centuria Industrial Reit | Macquarie Technology vs. 29Metals |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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