Correlation Between Macquarie Technology and Vicinity Centres
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Vicinity Centres 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 Vicinity Centres 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 Vicinity Centres Re, you can compare the effects of market volatilities on Macquarie Technology and Vicinity Centres 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 Vicinity Centres. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Vicinity Centres.
Diversification Opportunities for Macquarie Technology and Vicinity Centres
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Vicinity is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Vicinity Centres Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicinity Centres 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 Vicinity Centres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicinity Centres has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Vicinity Centres go up and down completely randomly.
Pair Corralation between Macquarie Technology and Vicinity Centres
Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 1.58 times more return on investment than Vicinity Centres. However, Macquarie Technology is 1.58 times more volatile than Vicinity Centres Re. It trades about 0.04 of its potential returns per unit of risk. Vicinity Centres Re is currently generating about -0.08 per unit of risk. If you would invest 8,200 in Macquarie Technology Group on October 20, 2024 and sell it today you would earn a total of 303.00 from holding Macquarie Technology Group or generate 3.7% 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. Vicinity Centres Re
Performance |
| Timeline |
| Macquarie Technology |
| Vicinity Centres |
Macquarie Technology and Vicinity Centres Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Vicinity Centres
The main advantage of trading using opposite Macquarie Technology and Vicinity Centres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Vicinity Centres 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 Vicinity Centres will offset losses from the drop in Vicinity Centres' long position.| Macquarie Technology vs. Sonic Healthcare | Macquarie Technology vs. Black Rock Mining | Macquarie Technology vs. Vitura Health Limited | Macquarie Technology vs. Truscott Mining Corp |
| Vicinity Centres vs. Scentre Group | Vicinity Centres vs. Charter Hall Retail | Vicinity Centres vs. Cromwell Property Group | Vicinity Centres vs. Carindale Property Trust |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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