Correlation Between Macquarie Technology and Superior Resources
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Superior 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 Superior 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 Superior Resources, you can compare the effects of market volatilities on Macquarie Technology and Superior 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 Superior Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Superior Resources.
Diversification Opportunities for Macquarie Technology and Superior Resources
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Superior is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Superior Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior 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 Superior Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Resources has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Superior Resources go up and down completely randomly.
Pair Corralation between Macquarie Technology and Superior Resources
Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the Superior Resources. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Technology Group is 6.12 times less risky than Superior Resources. The stock trades about -0.17 of its potential returns per unit of risk. The Superior Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.60 in Superior Resources on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Superior Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. Superior Resources
Performance |
| Timeline |
| Macquarie Technology |
| Superior Resources |
Macquarie Technology and Superior Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Superior Resources
The main advantage of trading using opposite Macquarie Technology and Superior Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Superior 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 Superior Resources will offset losses from the drop in Superior Resources' long position.| Macquarie Technology vs. TPG Telecom | Macquarie Technology vs. G8 Education | Macquarie Technology vs. Duxton Broadacre Farms | Macquarie Technology vs. Aussie Broadband |
| Superior Resources vs. Bailador Technology Invest | Superior Resources vs. Australian Unity Office | Superior Resources vs. Computershare | Superior Resources 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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