Correlation Between Macquarie Bank and Albion Resources
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Albion 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 Bank and Albion Resources 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 Albion Resources Limited, you can compare the effects of market volatilities on Macquarie Bank and Albion 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 Bank with a short position of Albion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Albion Resources.
Diversification Opportunities for Macquarie Bank and Albion Resources
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Macquarie and Albion is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Albion Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albion Resources 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 Albion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albion Resources has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Albion Resources go up and down completely randomly.
Pair Corralation between Macquarie Bank and Albion Resources
Assuming the 90 days trading horizon Macquarie Bank Limited is expected to generate 0.25 times more return on investment than Albion Resources. However, Macquarie Bank Limited is 3.95 times less risky than Albion Resources. It trades about 0.02 of its potential returns per unit of risk. Albion Resources Limited is currently generating about -0.16 per unit of risk. If you would invest 10,379 in Macquarie Bank Limited on September 1, 2024 and sell it today you would earn a total of 22.00 from holding Macquarie Bank Limited or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Macquarie Bank Limited vs. Albion Resources Limited
Performance |
| Timeline |
| Macquarie Bank |
| Albion Resources |
Macquarie Bank and Albion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Albion Resources
The main advantage of trading using opposite Macquarie Bank and Albion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Albion 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 Albion Resources will offset losses from the drop in Albion Resources' 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 |
| Albion Resources vs. Macquarie Bank Limited | Albion Resources vs. Auswide Bank | Albion Resources vs. Credit Clear | Albion Resources vs. Centaurus Metals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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