Correlation Between Macquarie and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both Macquarie and Carnegie Clean 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 and Carnegie Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group and Carnegie Clean Energy, you can compare the effects of market volatilities on Macquarie and Carnegie Clean 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 with a short position of Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie and Carnegie Clean.
Diversification Opportunities for Macquarie and Carnegie Clean
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macquarie and Carnegie is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy and Macquarie 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 Group are associated (or correlated) with Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of Macquarie i.e., Macquarie and Carnegie Clean go up and down completely randomly.
Pair Corralation between Macquarie and Carnegie Clean
Assuming the 90 days trading horizon Macquarie Group is expected to generate 0.36 times more return on investment than Carnegie Clean. However, Macquarie Group is 2.75 times less risky than Carnegie Clean. It trades about 0.15 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about 0.01 per unit of risk. If you would invest 18,623 in Macquarie Group on August 28, 2024 and sell it today you would earn a total of 4,621 from holding Macquarie Group or generate 24.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group vs. Carnegie Clean Energy
Performance |
| Timeline |
| Macquarie Group |
| Carnegie Clean Energy |
Macquarie and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie and Carnegie Clean
The main advantage of trading using opposite Macquarie and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie position performs unexpectedly, Carnegie Clean 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 Carnegie Clean will offset losses from the drop in Carnegie Clean's long position.| Macquarie vs. IDP Education | Macquarie vs. Embark Education Group | Macquarie vs. Australian Unity Office | Macquarie vs. Legacy Iron Ore |
| Carnegie Clean vs. Bank of Queensland | Carnegie Clean vs. Wt Financial Group | Carnegie Clean vs. Cleanaway Waste Management | Carnegie Clean vs. Platinum Asset Management |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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