Correlation Between Macquarie Bank and Epsilon Healthcare
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Epsilon Healthcare 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 Epsilon Healthcare 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 Epsilon Healthcare, you can compare the effects of market volatilities on Macquarie Bank and Epsilon Healthcare 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 Epsilon Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Epsilon Healthcare.
Diversification Opportunities for Macquarie Bank and Epsilon Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Macquarie and Epsilon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Epsilon Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epsilon Healthcare 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 Epsilon Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epsilon Healthcare has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Epsilon Healthcare go up and down completely randomly.
Pair Corralation between Macquarie Bank and Epsilon Healthcare
Assuming the 90 days trading horizon Macquarie Bank is expected to generate 4.9 times less return on investment than Epsilon Healthcare. But when comparing it to its historical volatility, Macquarie Bank Limited is 10.32 times less risky than Epsilon Healthcare. It trades about 0.08 of its potential returns per unit of risk. Epsilon Healthcare is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.80 in Epsilon Healthcare on September 19, 2024 and sell it today you would earn a total of 0.60 from holding Epsilon Healthcare or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Bank Limited vs. Epsilon Healthcare
Performance |
| Timeline |
| Macquarie Bank |
| Epsilon Healthcare |
Macquarie Bank and Epsilon Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Epsilon Healthcare
The main advantage of trading using opposite Macquarie Bank and Epsilon Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Epsilon Healthcare 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 Epsilon Healthcare will offset losses from the drop in Epsilon Healthcare's long position.| Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Polymetals Resources | Macquarie Bank vs. Ecofibre | Macquarie Bank vs. iShares Global Healthcare |
| Epsilon Healthcare vs. BSP Financial Group | Epsilon Healthcare vs. Magellan Financial Group | Epsilon Healthcare vs. Black Rock Mining | Epsilon Healthcare vs. Macquarie Bank Limited |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |