Correlation Between Macquarie and Magellan Financial
Can any of the company-specific risk be diversified away by investing in both Macquarie and Magellan Financial 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 Magellan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group and Magellan Financial Group, you can compare the effects of market volatilities on Macquarie and Magellan Financial 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 Magellan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie and Magellan Financial.
Diversification Opportunities for Macquarie and Magellan Financial
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macquarie and Magellan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Magellan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Financial 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 Magellan Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Financial has no effect on the direction of Macquarie i.e., Macquarie and Magellan Financial go up and down completely randomly.
Pair Corralation between Macquarie and Magellan Financial
Assuming the 90 days trading horizon Macquarie Group is expected to generate 0.88 times more return on investment than Magellan Financial. However, Macquarie Group is 1.13 times less risky than Magellan Financial. It trades about 0.11 of its potential returns per unit of risk. Magellan Financial Group is currently generating about -0.14 per unit of risk. If you would invest 22,622 in Macquarie Group on October 14, 2024 and sell it today you would earn a total of 498.00 from holding Macquarie Group or generate 2.2% 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. Magellan Financial Group
Performance |
| Timeline |
| Macquarie Group |
| Magellan Financial |
Macquarie and Magellan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie and Magellan Financial
The main advantage of trading using opposite Macquarie and Magellan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie position performs unexpectedly, Magellan Financial 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 Magellan Financial will offset losses from the drop in Magellan Financial's long position.| Macquarie vs. Super Retail Group | Macquarie vs. Dexus Convenience Retail | Macquarie vs. Autosports Group | Macquarie vs. Australian Unity Office |
| Magellan Financial vs. Stelar Metals | Magellan Financial vs. Falcon Metals | Magellan Financial vs. Dalaroo Metals | Magellan Financial vs. Sky 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |