Correlation Between Macquarie Bank and Sandon Capital
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Sandon Capital 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 Sandon Capital 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 Sandon Capital Investments, you can compare the effects of market volatilities on Macquarie Bank and Sandon Capital 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 Sandon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Sandon Capital.
Diversification Opportunities for Macquarie Bank and Sandon Capital
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Macquarie and Sandon is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Sandon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandon Capital Inves 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 Sandon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandon Capital Inves has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Sandon Capital go up and down completely randomly.
Pair Corralation between Macquarie Bank and Sandon Capital
Assuming the 90 days trading horizon Macquarie Bank Limited is expected to under-perform the Sandon Capital. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Bank Limited is 3.46 times less risky than Sandon Capital. The stock trades about -0.03 of its potential returns per unit of risk. The Sandon Capital Investments is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 79.00 in Sandon Capital Investments on November 7, 2024 and sell it today you would earn a total of 2.00 from holding Sandon Capital Investments or generate 2.53% 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. Sandon Capital Investments
Performance |
| Timeline |
| Macquarie Bank |
| Sandon Capital Inves |
Macquarie Bank and Sandon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Sandon Capital
The main advantage of trading using opposite Macquarie Bank and Sandon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Sandon Capital 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 Sandon Capital will offset losses from the drop in Sandon Capital's long position.| Macquarie Bank vs. EVE Health Group | Macquarie Bank vs. Austco Healthcare | Macquarie Bank vs. Centrex Metals | Macquarie Bank vs. Regis Healthcare |
| Sandon Capital vs. Aurelia Metals | Sandon Capital vs. Sky Metals | Sandon Capital vs. Rare Foods Australia | Sandon Capital vs. Land Homes Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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