Correlation Between Macquarie Bank and Hudson Investment
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Hudson Investment 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 Hudson Investment 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 Hudson Investment Group, you can compare the effects of market volatilities on Macquarie Bank and Hudson Investment 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 Hudson Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Hudson Investment.
Diversification Opportunities for Macquarie Bank and Hudson Investment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Macquarie and Hudson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Hudson Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Investment 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 Hudson Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Investment has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Hudson Investment go up and down completely randomly.
Pair Corralation between Macquarie Bank and Hudson Investment
Assuming the 90 days trading horizon Macquarie Bank Limited is expected to generate 0.29 times more return on investment than Hudson Investment. However, Macquarie Bank Limited is 3.42 times less risky than Hudson Investment. It trades about 0.06 of its potential returns per unit of risk. Hudson Investment Group is currently generating about -0.03 per unit of risk. If you would invest 9,058 in Macquarie Bank Limited on October 28, 2024 and sell it today you would earn a total of 1,317 from holding Macquarie Bank Limited or generate 14.54% 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. Hudson Investment Group
Performance |
| Timeline |
| Macquarie Bank |
| Hudson Investment |
Macquarie Bank and Hudson Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Hudson Investment
The main advantage of trading using opposite Macquarie Bank and Hudson Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Hudson Investment 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 Hudson Investment will offset losses from the drop in Hudson Investment's long position.| Macquarie Bank vs. Autosports Group | Macquarie Bank vs. Microequities Asset Management | Macquarie Bank vs. Health and Plant | Macquarie Bank vs. Vitura Health Limited |
| Hudson Investment vs. Perseus Mining | Hudson Investment vs. Galena Mining | Hudson Investment vs. De Grey Mining | Hudson Investment vs. Balkan Mining and |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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