Correlation Between Macquarie Bank and COAST ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and COAST 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 Bank and COAST ENTERTAINMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Bank Ltd and COAST ENTERTAINMENT HOLDINGS, you can compare the effects of market volatilities on Macquarie Bank and COAST 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 Bank with a short position of COAST ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and COAST ENTERTAINMENT.
Diversification Opportunities for Macquarie Bank and COAST ENTERTAINMENT
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and COAST is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Ltd and COAST ENTERTAINMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COAST ENTERTAINMENT and Macquarie Bank 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 Bank Ltd are associated (or correlated) with COAST ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COAST ENTERTAINMENT has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and COAST ENTERTAINMENT go up and down completely randomly.
Pair Corralation between Macquarie Bank and COAST ENTERTAINMENT
Assuming the 90 days trading horizon Macquarie Bank Ltd is expected to generate 0.11 times more return on investment than COAST ENTERTAINMENT. However, Macquarie Bank Ltd is 9.21 times less risky than COAST ENTERTAINMENT. It trades about 0.04 of its potential returns per unit of risk. COAST ENTERTAINMENT HOLDINGS is currently generating about -0.02 per unit of risk. If you would invest 10,303 in Macquarie Bank Ltd on September 3, 2024 and sell it today you would earn a total of 167.00 from holding Macquarie Bank Ltd or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Bank Ltd vs. COAST ENTERTAINMENT HOLDINGS
Performance |
| Timeline |
| Macquarie Bank |
| COAST ENTERTAINMENT |
Macquarie Bank and COAST ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and COAST ENTERTAINMENT
The main advantage of trading using opposite Macquarie Bank and COAST ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, COAST 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 COAST ENTERTAINMENT will offset losses from the drop in COAST ENTERTAINMENT's long position.| Macquarie Bank vs. COAST ENTERTAINMENT HOLDINGS | Macquarie Bank vs. Skycity Entertainment Group | Macquarie Bank vs. MetalsGrove Mining | Macquarie Bank vs. Ora Banda Mining |
| COAST ENTERTAINMENT vs. Viva Leisure | COAST ENTERTAINMENT vs. Toys R Us | COAST ENTERTAINMENT vs. Ecofibre | COAST ENTERTAINMENT vs. Champion Iron |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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