Correlation Between Macquarie and Credit Clear
Can any of the company-specific risk be diversified away by investing in both Macquarie and Credit Clear 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 Clear 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 Clear, you can compare the effects of market volatilities on Macquarie and Credit Clear 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 Clear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie and Credit Clear.
Diversification Opportunities for Macquarie and Credit Clear
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macquarie and Credit is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Credit Clear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Clear 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 Clear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Clear has no effect on the direction of Macquarie i.e., Macquarie and Credit Clear go up and down completely randomly.
Pair Corralation between Macquarie and Credit Clear
Assuming the 90 days trading horizon Macquarie is expected to generate 19.38 times less return on investment than Credit Clear. But when comparing it to its historical volatility, Macquarie Group is 2.48 times less risky than Credit Clear. It trades about 0.02 of its potential returns per unit of risk. Credit Clear is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Credit Clear on August 27, 2024 and sell it today you would earn a total of 3.00 from holding Credit Clear or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group vs. Credit Clear
Performance |
| Timeline |
| Macquarie Group |
| Credit Clear |
Macquarie and Credit Clear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie and Credit Clear
The main advantage of trading using opposite Macquarie and Credit Clear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie position performs unexpectedly, Credit Clear 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 Clear will offset losses from the drop in Credit Clear's long position.| Macquarie vs. Vulcan Steel | Macquarie vs. Charter Hall Education | Macquarie vs. Queste Communications | Macquarie vs. Dicker Data |
| Credit Clear vs. Thorney Technologies | Credit Clear vs. Richmond Vanadium Technology | Credit Clear vs. Mach7 Technologies | Credit Clear vs. Aurelia Metals |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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