Correlation Between Macquarie Bank and Diversified United
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Diversified United 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 Diversified United 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 Diversified United Investment, you can compare the effects of market volatilities on Macquarie Bank and Diversified United 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 Diversified United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Diversified United.
Diversification Opportunities for Macquarie Bank and Diversified United
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Macquarie and Diversified is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Diversified United Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified United 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 Diversified United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified United has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Diversified United go up and down completely randomly.
Pair Corralation between Macquarie Bank and Diversified United
Assuming the 90 days trading horizon Macquarie Bank Limited is expected to generate 0.57 times more return on investment than Diversified United. However, Macquarie Bank Limited is 1.74 times less risky than Diversified United. It trades about 0.18 of its potential returns per unit of risk. Diversified United Investment is currently generating about -0.06 per unit of risk. If you would invest 10,255 in Macquarie Bank Limited on October 14, 2024 and sell it today you would earn a total of 150.00 from holding Macquarie Bank Limited or generate 1.46% 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. Diversified United Investment
Performance |
| Timeline |
| Macquarie Bank |
| Diversified United |
Macquarie Bank and Diversified United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Diversified United
The main advantage of trading using opposite Macquarie Bank and Diversified United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Diversified United 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 Diversified United will offset losses from the drop in Diversified United's long position.| Macquarie Bank vs. RLF AgTech | Macquarie Bank vs. Advanced Braking Technology | Macquarie Bank vs. Genetic Technologies | Macquarie Bank vs. Mirrabooka Investments |
| Diversified United vs. Iron Road | Diversified United vs. Macquarie Bank Limited | Diversified United vs. BSP Financial Group | Diversified United vs. Medibank Private |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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