Correlation Between Macquarie Group and Data3
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and Data3 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 Data3 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 Data3, you can compare the effects of market volatilities on Macquarie Group and Data3 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 Data3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and Data3.
Diversification Opportunities for Macquarie Group and Data3
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Macquarie and Data3 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and Data3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data3 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 Data3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data3 has no effect on the direction of Macquarie Group i.e., Macquarie Group and Data3 go up and down completely randomly.
Pair Corralation between Macquarie Group and Data3
Assuming the 90 days trading horizon Macquarie Group is expected to generate 14.53 times less return on investment than Data3. But when comparing it to its historical volatility, Macquarie Group Ltd is 6.65 times less risky than Data3. It trades about 0.07 of its potential returns per unit of risk. Data3 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 727.00 in Data3 on August 29, 2024 and sell it today you would earn a total of 49.00 from holding Data3 or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group Ltd vs. Data3
Performance |
| Timeline |
| Macquarie Group |
| Data3 |
Macquarie Group and Data3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and Data3
The main advantage of trading using opposite Macquarie Group and Data3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, Data3 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 Data3 will offset losses from the drop in Data3's long position.| Macquarie Group vs. AMP | Macquarie Group vs. Regal Investment | Macquarie Group vs. REGAL ASIAN INVESTMENTS |
| Data3 vs. Westpac Banking | Data3 vs. Ecofibre | Data3 vs. iShares Global Healthcare | Data3 vs. Adriatic Metals Plc |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |