Correlation Between Macquarie Bank and Black Rock
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Black Rock 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 Black Rock 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 Black Rock Mining, you can compare the effects of market volatilities on Macquarie Bank and Black Rock 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 Black Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Black Rock.
Diversification Opportunities for Macquarie Bank and Black Rock
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Macquarie and Black is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Black Rock Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Rock Mining 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 Black Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Rock Mining has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Black Rock go up and down completely randomly.
Pair Corralation between Macquarie Bank and Black Rock
Assuming the 90 days trading horizon Macquarie Bank is expected to generate 10.22 times less return on investment than Black Rock. But when comparing it to its historical volatility, Macquarie Bank Limited is 8.51 times less risky than Black Rock. It trades about 0.12 of its potential returns per unit of risk. Black Rock Mining is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3.10 in Black Rock Mining on October 12, 2024 and sell it today you would earn a total of 0.30 from holding Black Rock Mining or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Bank Limited vs. Black Rock Mining
Performance |
| Timeline |
| Macquarie Bank |
| Black Rock Mining |
Macquarie Bank and Black Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Black Rock
The main advantage of trading using opposite Macquarie Bank and Black Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Black Rock 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 Black Rock will offset losses from the drop in Black Rock's long position.| Macquarie Bank vs. Centrex Metals | Macquarie Bank vs. Stelar Metals | Macquarie Bank vs. Aurelia Metals | Macquarie Bank vs. DY6 Metals |
| Black Rock vs. Auswide Bank | Black Rock vs. Macquarie Bank Limited | Black Rock vs. Liberty Financial Group | Black Rock vs. Bank of Queensland |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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