Correlation Between Macquarie Group and Australian Agri
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and Australian Agri 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 Group and Australian Agri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group Ltd and Australian Agri Projects, you can compare the effects of market volatilities on Macquarie Group and Australian Agri 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 Group with a short position of Australian Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and Australian Agri.
Diversification Opportunities for Macquarie Group and Australian Agri
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macquarie and Australian is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and Australian Agri Projects in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Agri Projects and Macquarie Group 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 Ltd are associated (or correlated) with Australian Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Agri Projects has no effect on the direction of Macquarie Group i.e., Macquarie Group and Australian Agri go up and down completely randomly.
Pair Corralation between Macquarie Group and Australian Agri
Assuming the 90 days trading horizon Macquarie Group is expected to generate 32.06 times less return on investment than Australian Agri. But when comparing it to its historical volatility, Macquarie Group Ltd is 8.83 times less risky than Australian Agri. It trades about 0.04 of its potential returns per unit of risk. Australian Agri Projects is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Australian Agri Projects on November 2, 2024 and sell it today you would earn a total of 1.60 from holding Australian Agri Projects or generate 64.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group Ltd vs. Australian Agri Projects
Performance |
| Timeline |
| Macquarie Group |
| Australian Agri Projects |
Macquarie Group and Australian Agri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and Australian Agri
The main advantage of trading using opposite Macquarie Group and Australian Agri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, Australian Agri 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 Australian Agri will offset losses from the drop in Australian Agri's long position.| Macquarie Group vs. Charter Hall Education | Macquarie Group vs. Cleanaway Waste Management | Macquarie Group vs. Kkr Credit Income | Macquarie Group vs. Australian Agricultural |
| Australian Agri vs. Iron Road | Australian Agri vs. Aeris Environmental | Australian Agri vs. Air New Zealand | Australian Agri 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |