Correlation Between Macquarie Bank and Hutchison Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Hutchison Telecommunicatio 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 Hutchison Telecommunicatio 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 Hutchison Telecommunications, you can compare the effects of market volatilities on Macquarie Bank and Hutchison Telecommunicatio 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 Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Hutchison Telecommunicatio.
Diversification Opportunities for Macquarie Bank and Hutchison Telecommunicatio
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Hutchison is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio 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 Hutchison Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hutchison Telecommunicatio has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Hutchison Telecommunicatio go up and down completely randomly.
Pair Corralation between Macquarie Bank and Hutchison Telecommunicatio
Assuming the 90 days trading horizon Macquarie Bank Limited is expected to generate 0.17 times more return on investment than Hutchison Telecommunicatio. However, Macquarie Bank Limited is 5.92 times less risky than Hutchison Telecommunicatio. It trades about 0.07 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about -0.15 per unit of risk. If you would invest 10,301 in Macquarie Bank Limited on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Macquarie Bank Limited or generate 0.97% 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. Hutchison Telecommunications
Performance |
| Timeline |
| Macquarie Bank |
| Hutchison Telecommunicatio |
Macquarie Bank and Hutchison Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Hutchison Telecommunicatio
The main advantage of trading using opposite Macquarie Bank and Hutchison Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Hutchison Telecommunicatio 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 Hutchison Telecommunicatio will offset losses from the drop in Hutchison Telecommunicatio'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 |
| Hutchison Telecommunicatio vs. Skycity Entertainment Group | Hutchison Telecommunicatio vs. Collins Foods | Hutchison Telecommunicatio vs. Gold Road Resources | Hutchison Telecommunicatio vs. Iron Road |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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