Correlation Between Macquarie Bank and SPASX Dividend
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and SPASX Dividend 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 SPASX Dividend 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 SPASX Dividend Opportunities, you can compare the effects of market volatilities on Macquarie Bank and SPASX Dividend 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 SPASX Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and SPASX Dividend.
Diversification Opportunities for Macquarie Bank and SPASX Dividend
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Macquarie and SPASX is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and SPASX Dividend Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPASX Dividend Oppor 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 SPASX Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPASX Dividend Oppor has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and SPASX Dividend go up and down completely randomly.
Pair Corralation between Macquarie Bank and SPASX Dividend
Assuming the 90 days trading horizon Macquarie Bank is expected to generate 3.09 times less return on investment than SPASX Dividend. But when comparing it to its historical volatility, Macquarie Bank Limited is 1.0 times less risky than SPASX Dividend. It trades about 0.02 of its potential returns per unit of risk. SPASX Dividend Opportunities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 167,530 in SPASX Dividend Opportunities on September 5, 2024 and sell it today you would earn a total of 3,030 from holding SPASX Dividend Opportunities or generate 1.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Macquarie Bank Limited vs. SPASX Dividend Opportunities
Performance |
Timeline |
Macquarie Bank and SPASX Dividend Volatility Contrast
Predicted Return Density |
Returns |
Macquarie Bank Limited
Pair trading matchups for Macquarie Bank
SPASX Dividend Opportunities
Pair trading matchups for SPASX Dividend
Pair Trading with Macquarie Bank and SPASX Dividend
The main advantage of trading using opposite Macquarie Bank and SPASX Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, SPASX Dividend 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 SPASX Dividend will offset losses from the drop in SPASX Dividend'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 |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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