Correlation Between Macquarie Bank and Aussie Broadband
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Aussie Broadband 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 Aussie Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Bank Limited and Aussie Broadband, you can compare the effects of market volatilities on Macquarie Bank and Aussie Broadband 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 Aussie Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Aussie Broadband.
Diversification Opportunities for Macquarie Bank and Aussie Broadband
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Macquarie and Aussie is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Aussie Broadband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aussie Broadband 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 Limited are associated (or correlated) with Aussie Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aussie Broadband has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Aussie Broadband go up and down completely randomly.
Pair Corralation between Macquarie Bank and Aussie Broadband
Assuming the 90 days trading horizon Macquarie Bank Limited is expected to generate 0.37 times more return on investment than Aussie Broadband. However, Macquarie Bank Limited is 2.74 times less risky than Aussie Broadband. It trades about 0.09 of its potential returns per unit of risk. Aussie Broadband is currently generating about 0.03 per unit of risk. If you would invest 10,359 in Macquarie Bank Limited on September 4, 2024 and sell it today you would earn a total of 139.00 from holding Macquarie Bank Limited or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Bank Limited vs. Aussie Broadband
Performance |
| Timeline |
| Macquarie Bank |
| Aussie Broadband |
Macquarie Bank and Aussie Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Aussie Broadband
The main advantage of trading using opposite Macquarie Bank and Aussie Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Aussie Broadband 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 Aussie Broadband will offset losses from the drop in Aussie Broadband's long position.| Macquarie Bank vs. NEWMONT PORATION CDI | Macquarie Bank vs. Ssr Mining | Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Black Cat Syndicate |
| Aussie Broadband vs. Aneka Tambang Tbk | Aussie Broadband vs. BHP Group Limited | Aussie Broadband vs. Rio Tinto | Aussie Broadband vs. Macquarie Group Ltd |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |