Correlation Between Macquarie Bank and Anson Resources
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Anson 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 Anson 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 Anson Resources, you can compare the effects of market volatilities on Macquarie Bank and Anson 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 Anson Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Anson Resources.
Diversification Opportunities for Macquarie Bank and Anson Resources
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Macquarie and Anson is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Anson Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anson 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 Anson Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anson Resources has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Anson Resources go up and down completely randomly.
Pair Corralation between Macquarie Bank and Anson Resources
Assuming the 90 days trading horizon Macquarie Bank Limited is expected to generate 0.17 times more return on investment than Anson Resources. However, Macquarie Bank Limited is 5.95 times less risky than Anson Resources. It trades about 0.05 of its potential returns per unit of risk. Anson Resources is currently generating about -0.21 per unit of risk. If you would invest 10,135 in Macquarie Bank Limited on September 12, 2024 and sell it today you would earn a total of 165.00 from holding Macquarie Bank Limited or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Macquarie Bank Limited vs. Anson Resources
Performance |
| Timeline |
| Macquarie Bank |
| Anson Resources |
Macquarie Bank and Anson Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Anson Resources
The main advantage of trading using opposite Macquarie Bank and Anson Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Anson 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 Anson Resources will offset losses from the drop in Anson Resources' long position.| Macquarie Bank vs. Environmental Clean Technologies | Macquarie Bank vs. Srj Technologies Group | Macquarie Bank vs. G8 Education | Macquarie Bank vs. Richmond Vanadium Technology |
| Anson Resources vs. Carlton Investments | Anson Resources vs. Cleanaway Waste Management | Anson Resources vs. Mirrabooka Investments | Anson Resources vs. Retail Food Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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