Correlation Between Macquarie Bank and BSP Financial
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and BSP Financial 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 BSP Financial 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 BSP Financial Group, you can compare the effects of market volatilities on Macquarie Bank and BSP Financial 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 BSP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and BSP Financial.
Diversification Opportunities for Macquarie Bank and BSP Financial
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Macquarie and BSP is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and BSP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSP Financial Group 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 BSP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSP Financial Group has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and BSP Financial go up and down completely randomly.
Pair Corralation between Macquarie Bank and BSP Financial
Assuming the 90 days trading horizon Macquarie Bank is expected to generate 7.75 times less return on investment than BSP Financial. But when comparing it to its historical volatility, Macquarie Bank Limited is 2.69 times less risky than BSP Financial. It trades about 0.06 of its potential returns per unit of risk. BSP Financial Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 630.00 in BSP Financial Group on August 31, 2024 and sell it today you would earn a total of 46.00 from holding BSP Financial Group or generate 7.3% 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. BSP Financial Group
Performance |
| Timeline |
| Macquarie Bank |
| BSP Financial Group |
Macquarie Bank and BSP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and BSP Financial
The main advantage of trading using opposite Macquarie Bank and BSP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, BSP Financial 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 BSP Financial will offset losses from the drop in BSP Financial's long position.| Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Polymetals Resources | Macquarie Bank vs. Ecofibre | Macquarie Bank vs. iShares Global Healthcare |
| BSP Financial vs. K2 Asset Management | BSP Financial vs. Mount Gibson Iron | BSP Financial vs. Bluescope Steel | BSP Financial vs. Hawsons 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |