Correlation Between Macquarie Group and E79 Gold
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and E79 Gold 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 E79 Gold 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 E79 Gold Mines, you can compare the effects of market volatilities on Macquarie Group and E79 Gold 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 E79 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and E79 Gold.
Diversification Opportunities for Macquarie Group and E79 Gold
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and E79 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and E79 Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E79 Gold Mines 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 E79 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E79 Gold Mines has no effect on the direction of Macquarie Group i.e., Macquarie Group and E79 Gold go up and down completely randomly.
Pair Corralation between Macquarie Group and E79 Gold
Assuming the 90 days trading horizon Macquarie Group Ltd is expected to generate 0.06 times more return on investment than E79 Gold. However, Macquarie Group Ltd is 15.41 times less risky than E79 Gold. It trades about 0.07 of its potential returns per unit of risk. E79 Gold Mines is currently generating about -0.05 per unit of risk. If you would invest 9,904 in Macquarie Group Ltd on August 27, 2024 and sell it today you would earn a total of 646.00 from holding Macquarie Group Ltd or generate 6.52% 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. E79 Gold Mines
Performance |
| Timeline |
| Macquarie Group |
| E79 Gold Mines |
Macquarie Group and E79 Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and E79 Gold
The main advantage of trading using opposite Macquarie Group and E79 Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, E79 Gold 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 E79 Gold will offset losses from the drop in E79 Gold's long position.| Macquarie Group vs. AMP | Macquarie Group vs. Regal Investment | Macquarie Group vs. REGAL ASIAN INVESTMENTS |
| E79 Gold vs. G8 Education | E79 Gold vs. Perseus Mining | E79 Gold vs. Hutchison Telecommunications | E79 Gold vs. Janison Education Group |
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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