Correlation Between Macquarie and Playside Studios
Can any of the company-specific risk be diversified away by investing in both Macquarie and Playside Studios 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 Playside Studios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group and Playside Studios, you can compare the effects of market volatilities on Macquarie and Playside Studios 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 Playside Studios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie and Playside Studios.
Diversification Opportunities for Macquarie and Playside Studios
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Playside is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Playside Studios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playside Studios 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 Playside Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playside Studios has no effect on the direction of Macquarie i.e., Macquarie and Playside Studios go up and down completely randomly.
Pair Corralation between Macquarie and Playside Studios
Assuming the 90 days trading horizon Macquarie Group is expected to generate 0.25 times more return on investment than Playside Studios. However, Macquarie Group is 4.01 times less risky than Playside Studios. It trades about 0.06 of its potential returns per unit of risk. Playside Studios is currently generating about 0.0 per unit of risk. If you would invest 17,821 in Macquarie Group on November 5, 2024 and sell it today you would earn a total of 6,259 from holding Macquarie Group or generate 35.12% 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. Playside Studios
Performance |
| Timeline |
| Macquarie Group |
| Playside Studios |
Macquarie and Playside Studios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie and Playside Studios
The main advantage of trading using opposite Macquarie and Playside Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie position performs unexpectedly, Playside Studios 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 Playside Studios will offset losses from the drop in Playside Studios' long position.| Macquarie vs. Home Consortium | Macquarie vs. Dexus Convenience Retail | Macquarie vs. Viva Leisure | Macquarie vs. Retail Food Group |
| Playside Studios vs. Health and Plant | Playside Studios vs. EROAD | Playside Studios vs. Aussie Broadband | Playside Studios vs. Cleanaway Waste Management |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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