Correlation Between Macquarie and Credit Corp
Can any of the company-specific risk be diversified away by investing in both Macquarie and Credit Corp 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 Credit Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group and Credit Corp Group, you can compare the effects of market volatilities on Macquarie and Credit Corp 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 Credit Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie and Credit Corp.
Diversification Opportunities for Macquarie and Credit Corp
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macquarie and Credit is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Credit Corp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Corp Group 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 Credit Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Corp Group has no effect on the direction of Macquarie i.e., Macquarie and Credit Corp go up and down completely randomly.
Pair Corralation between Macquarie and Credit Corp
Assuming the 90 days trading horizon Macquarie Group is expected to generate 0.52 times more return on investment than Credit Corp. However, Macquarie Group is 1.91 times less risky than Credit Corp. It trades about -0.05 of its potential returns per unit of risk. Credit Corp Group is currently generating about -0.28 per unit of risk. If you would invest 22,882 in Macquarie Group on September 12, 2024 and sell it today you would lose (197.00) from holding Macquarie Group or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Macquarie Group vs. Credit Corp Group
Performance |
| Timeline |
| Macquarie Group |
| Credit Corp Group |
Macquarie and Credit Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie and Credit Corp
The main advantage of trading using opposite Macquarie and Credit Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie position performs unexpectedly, Credit Corp 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 Credit Corp will offset losses from the drop in Credit Corp's long position.| Macquarie vs. Austco Healthcare | Macquarie vs. Bell Financial Group | Macquarie vs. Oneview Healthcare PLC | Macquarie vs. Bank of Queensland |
| Credit Corp vs. Ora Banda Mining | Credit Corp vs. Srj Technologies Group | Credit Corp vs. Metro Mining | Credit Corp vs. Aspire Mining |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |