Correlation Between Macquarie and Integral Diagnostics
Can any of the company-specific risk be diversified away by investing in both Macquarie and Integral Diagnostics 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 Integral Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group and Integral Diagnostics, you can compare the effects of market volatilities on Macquarie and Integral Diagnostics 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 Integral Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie and Integral Diagnostics.
Diversification Opportunities for Macquarie and Integral Diagnostics
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macquarie and Integral is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Integral Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Diagnostics 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 Integral Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Diagnostics has no effect on the direction of Macquarie i.e., Macquarie and Integral Diagnostics go up and down completely randomly.
Pair Corralation between Macquarie and Integral Diagnostics
Assuming the 90 days trading horizon Macquarie Group is expected to under-perform the Integral Diagnostics. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Group is 2.84 times less risky than Integral Diagnostics. The stock trades about -0.15 of its potential returns per unit of risk. The Integral Diagnostics is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 313.00 in Integral Diagnostics on September 13, 2024 and sell it today you would lose (8.00) from holding Integral Diagnostics or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Macquarie Group vs. Integral Diagnostics
Performance |
| Timeline |
| Macquarie Group |
| Integral Diagnostics |
Macquarie and Integral Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie and Integral Diagnostics
The main advantage of trading using opposite Macquarie and Integral Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie position performs unexpectedly, Integral Diagnostics 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 Integral Diagnostics will offset losses from the drop in Integral Diagnostics' long position.| Macquarie vs. Black Rock Mining | Macquarie vs. MetalsGrove Mining | Macquarie vs. Microequities Asset Management | Macquarie vs. Australian Unity Office |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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