Correlation Between Macquarie Bank and Medibank Private
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Medibank Private 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 Medibank Private 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 Medibank Private, you can compare the effects of market volatilities on Macquarie Bank and Medibank Private 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 Medibank Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Medibank Private.
Diversification Opportunities for Macquarie Bank and Medibank Private
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macquarie and Medibank is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Medibank Private in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medibank Private 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 Medibank Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medibank Private has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Medibank Private go up and down completely randomly.
Pair Corralation between Macquarie Bank and Medibank Private
Assuming the 90 days trading horizon Macquarie Bank Limited is expected to under-perform the Medibank Private. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Bank Limited is 1.44 times less risky than Medibank Private. The stock trades about -0.14 of its potential returns per unit of risk. The Medibank Private is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 374.00 in Medibank Private on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Medibank Private or generate 0.0% 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. Medibank Private
Performance |
| Timeline |
| Macquarie Bank |
| Medibank Private |
Macquarie Bank and Medibank Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Medibank Private
The main advantage of trading using opposite Macquarie Bank and Medibank Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Medibank Private 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 Medibank Private will offset losses from the drop in Medibank Private's long position.| Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Polymetals Resources | Macquarie Bank vs. Ecofibre | Macquarie Bank vs. iShares Global Healthcare |
| Medibank Private vs. TPG Telecom | Medibank Private vs. Magellan Financial Group | Medibank Private vs. Macquarie Bank Limited | Medibank Private vs. Perpetual Credit Income |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |