Correlation Between Macquarie and OOhMedia
Can any of the company-specific risk be diversified away by investing in both Macquarie and OOhMedia 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 OOhMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group and oOhMedia, you can compare the effects of market volatilities on Macquarie and OOhMedia 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 OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie and OOhMedia.
Diversification Opportunities for Macquarie and OOhMedia
Good diversification
The 3 months correlation between Macquarie and OOhMedia is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia 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 OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Macquarie i.e., Macquarie and OOhMedia go up and down completely randomly.
Pair Corralation between Macquarie and OOhMedia
Assuming the 90 days trading horizon Macquarie is expected to generate 4.27 times less return on investment than OOhMedia. In addition to that, Macquarie is 1.19 times more volatile than oOhMedia. It trades about 0.03 of its total potential returns per unit of risk. oOhMedia is currently generating about 0.13 per unit of volatility. If you would invest 120.00 in oOhMedia on August 30, 2024 and sell it today you would earn a total of 4.00 from holding oOhMedia or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group vs. oOhMedia
Performance |
| Timeline |
| Macquarie Group |
| oOhMedia |
Macquarie and OOhMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie and OOhMedia
The main advantage of trading using opposite Macquarie and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie position performs unexpectedly, OOhMedia 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 OOhMedia will offset losses from the drop in OOhMedia's long position.| Macquarie vs. Hutchison Telecommunications | Macquarie vs. Iron Road | Macquarie vs. Kingsrose Mining | Macquarie vs. Andean Silver Limited |
| OOhMedia vs. Macquarie Group | OOhMedia vs. Macquarie Group Ltd | OOhMedia vs. Commonwealth Bank | OOhMedia vs. Rio Tinto |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |