Correlation Between Macquarie and Seek
Can any of the company-specific risk be diversified away by investing in both Macquarie and Seek 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 Seek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group and Seek, you can compare the effects of market volatilities on Macquarie and Seek 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 Seek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie and Seek.
Diversification Opportunities for Macquarie and Seek
Poor diversification
The 3 months correlation between Macquarie and Seek is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Seek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seek 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 Seek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seek has no effect on the direction of Macquarie i.e., Macquarie and Seek go up and down completely randomly.
Pair Corralation between Macquarie and Seek
Assuming the 90 days trading horizon Macquarie is expected to generate 4.68 times less return on investment than Seek. In addition to that, Macquarie is 1.01 times more volatile than Seek. It trades about 0.04 of its total potential returns per unit of risk. Seek is currently generating about 0.18 per unit of volatility. If you would invest 2,494 in Seek on September 1, 2024 and sell it today you would earn a total of 135.00 from holding Seek or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group vs. Seek
Performance |
| Timeline |
| Macquarie Group |
| Seek |
Macquarie and Seek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie and Seek
The main advantage of trading using opposite Macquarie and Seek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie position performs unexpectedly, Seek 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 Seek will offset losses from the drop in Seek's long position.| Macquarie vs. DY6 Metals | Macquarie vs. WiseTech Global Limited | Macquarie vs. Leeuwin Metals | Macquarie vs. Land Homes Group |
| Seek vs. Vulcan Steel | Seek vs. The Environmental Group | Seek vs. Autosports Group | Seek vs. Centaurus 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |