Correlation Between Macquarie Bank and Computershare
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Computershare 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 Computershare 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 Computershare, you can compare the effects of market volatilities on Macquarie Bank and Computershare 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 Computershare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Computershare.
Diversification Opportunities for Macquarie Bank and Computershare
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Macquarie and Computershare is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Computershare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computershare 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 Computershare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computershare has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Computershare go up and down completely randomly.
Pair Corralation between Macquarie Bank and Computershare
Assuming the 90 days trading horizon Macquarie Bank is expected to generate 19.77 times less return on investment than Computershare. But when comparing it to its historical volatility, Macquarie Bank Limited is 2.75 times less risky than Computershare. It trades about 0.07 of its potential returns per unit of risk. Computershare is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 2,622 in Computershare on September 2, 2024 and sell it today you would earn a total of 567.00 from holding Computershare or generate 21.62% 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. Computershare
Performance |
| Timeline |
| Macquarie Bank |
| Computershare |
Macquarie Bank and Computershare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Computershare
The main advantage of trading using opposite Macquarie Bank and Computershare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Computershare 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 Computershare will offset losses from the drop in Computershare's long position.| Macquarie Bank vs. MFF Capital Investments | Macquarie Bank vs. Pinnacle Investment Management | Macquarie Bank vs. Regal Investment | Macquarie Bank vs. Truscott Mining Corp |
| Computershare vs. Clime Investment Management | Computershare vs. M3 Mining | Computershare vs. Platinum Asset Management | Computershare vs. Perseus Mining |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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