Correlation Between Macquarie Group and Apiam Animal
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and Apiam Animal 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 Apiam Animal 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 Apiam Animal Health, you can compare the effects of market volatilities on Macquarie Group and Apiam Animal 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 Apiam Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and Apiam Animal.
Diversification Opportunities for Macquarie Group and Apiam Animal
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Macquarie and Apiam is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and Apiam Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apiam Animal Health 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 Apiam Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apiam Animal Health has no effect on the direction of Macquarie Group i.e., Macquarie Group and Apiam Animal go up and down completely randomly.
Pair Corralation between Macquarie Group and Apiam Animal
Assuming the 90 days trading horizon Macquarie Group is expected to generate 6.6 times less return on investment than Apiam Animal. But when comparing it to its historical volatility, Macquarie Group Ltd is 15.29 times less risky than Apiam Animal. It trades about 0.13 of its potential returns per unit of risk. Apiam Animal Health is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Apiam Animal Health on October 26, 2024 and sell it today you would earn a total of 1.00 from holding Apiam Animal Health or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group Ltd vs. Apiam Animal Health
Performance |
| Timeline |
| Macquarie Group |
| Apiam Animal Health |
Macquarie Group and Apiam Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and Apiam Animal
The main advantage of trading using opposite Macquarie Group and Apiam Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, Apiam Animal 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 Apiam Animal will offset losses from the drop in Apiam Animal's long position.| Macquarie Group vs. Insurance Australia Group | Macquarie Group vs. Sequoia Financial Group | Macquarie Group vs. A1 Investments Resources | Macquarie Group vs. Alternative Investment Trust |
| Apiam Animal vs. Macquarie Group | Apiam Animal vs. Macquarie Group Ltd | Apiam Animal vs. Commonwealth Bank | Apiam Animal 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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