Correlation Between Macquariefirst and New America
Can any of the company-specific risk be diversified away by investing in both Macquariefirst and New America 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 Macquariefirst and New America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquariefirst Tr Global and New America High, you can compare the effects of market volatilities on Macquariefirst and New America 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 Macquariefirst with a short position of New America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquariefirst and New America.
Diversification Opportunities for Macquariefirst and New America
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Macquariefirst and New is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Macquariefirst Tr Global and New America High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New America High and Macquariefirst 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 Macquariefirst Tr Global are associated (or correlated) with New America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New America High has no effect on the direction of Macquariefirst i.e., Macquariefirst and New America go up and down completely randomly.
Pair Corralation between Macquariefirst and New America
Considering the 90-day investment horizon Macquariefirst is expected to generate 1.39 times less return on investment than New America. In addition to that, Macquariefirst is 1.36 times more volatile than New America High. It trades about 0.07 of its total potential returns per unit of risk. New America High is currently generating about 0.13 per unit of volatility. If you would invest 596.00 in New America High on September 4, 2024 and sell it today you would earn a total of 234.00 from holding New America High or generate 39.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.83% |
| Values | Daily Returns |
Macquariefirst Tr Global vs. New America High
Performance |
| Timeline |
| Macquariefirst Tr Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| New America High |
Macquariefirst and New America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquariefirst and New America
The main advantage of trading using opposite Macquariefirst and New America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquariefirst position performs unexpectedly, New America 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 New America will offset losses from the drop in New America's long position.| Macquariefirst vs. MFS High Yield | Macquariefirst vs. MFS Investment Grade | Macquariefirst vs. MFS Municipal Income | Macquariefirst vs. DTF Tax Free |
| New America vs. Advent Claymore Convertible | New America vs. Blackstone Gso Strategic | New America vs. Western Asset Investment | New America vs. Pioneer Floating Rate |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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