Correlation Between Macquarie Technology and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Treasury Wine 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 Treasury Wine 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 Treasury Wine Estates, you can compare the effects of market volatilities on Macquarie Technology and Treasury Wine 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 Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Treasury Wine.
Diversification Opportunities for Macquarie Technology and Treasury Wine
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Treasury is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates 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 Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Treasury Wine go up and down completely randomly.
Pair Corralation between Macquarie Technology and Treasury Wine
Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the Treasury Wine. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Technology Group is 1.03 times less risky than Treasury Wine. The stock trades about -0.22 of its potential returns per unit of risk. The Treasury Wine Estates is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,087 in Treasury Wine Estates on September 14, 2024 and sell it today you would earn a total of 92.00 from holding Treasury Wine Estates or generate 8.46% 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. Treasury Wine Estates
Performance |
| Timeline |
| Macquarie Technology |
| Treasury Wine Estates |
Macquarie Technology and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Treasury Wine
The main advantage of trading using opposite Macquarie Technology and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Treasury Wine 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 Treasury Wine will offset losses from the drop in Treasury Wine's long position.| Macquarie Technology vs. Energy Resources | Macquarie Technology vs. 88 Energy | Macquarie Technology vs. Amani Gold | Macquarie Technology vs. A1 Investments Resources |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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