Correlation Between Macquarie and Skycity Entertainment
Can any of the company-specific risk be diversified away by investing in both Macquarie and Skycity Entertainment 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 Skycity Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group and Skycity Entertainment Group, you can compare the effects of market volatilities on Macquarie and Skycity Entertainment 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 Skycity Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie and Skycity Entertainment.
Diversification Opportunities for Macquarie and Skycity Entertainment
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Skycity is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Skycity Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skycity Entertainment 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 Skycity Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skycity Entertainment has no effect on the direction of Macquarie i.e., Macquarie and Skycity Entertainment go up and down completely randomly.
Pair Corralation between Macquarie and Skycity Entertainment
Assuming the 90 days trading horizon Macquarie is expected to generate 1.11 times less return on investment than Skycity Entertainment. But when comparing it to its historical volatility, Macquarie Group is 2.15 times less risky than Skycity Entertainment. It trades about 0.19 of its potential returns per unit of risk. Skycity Entertainment Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Skycity Entertainment Group on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Skycity Entertainment Group or generate 4.8% 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. Skycity Entertainment Group
Performance |
| Timeline |
| Macquarie Group |
| Skycity Entertainment |
Macquarie and Skycity Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie and Skycity Entertainment
The main advantage of trading using opposite Macquarie and Skycity Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie position performs unexpectedly, Skycity Entertainment 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 Skycity Entertainment will offset losses from the drop in Skycity Entertainment's long position.| Macquarie vs. Aneka Tambang Tbk | Macquarie vs. Macquarie Group Ltd | Macquarie vs. Challenger | Macquarie vs. BHP Group Limited |
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 CEOs Directory module to screen CEOs from public companies around the world.
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