Correlation Between Macquarie Group and Garda Diversified
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and Garda Diversified 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 Garda Diversified 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 Garda Diversified Ppty, you can compare the effects of market volatilities on Macquarie Group and Garda Diversified 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 Garda Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and Garda Diversified.
Diversification Opportunities for Macquarie Group and Garda Diversified
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macquarie and Garda is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and Garda Diversified Ppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garda Diversified Ppty 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 Garda Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garda Diversified Ppty has no effect on the direction of Macquarie Group i.e., Macquarie Group and Garda Diversified go up and down completely randomly.
Pair Corralation between Macquarie Group and Garda Diversified
Assuming the 90 days trading horizon Macquarie Group Ltd is expected to generate 0.27 times more return on investment than Garda Diversified. However, Macquarie Group Ltd is 3.7 times less risky than Garda Diversified. It trades about 0.05 of its potential returns per unit of risk. Garda Diversified Ppty is currently generating about 0.01 per unit of risk. If you would invest 9,360 in Macquarie Group Ltd on September 12, 2024 and sell it today you would earn a total of 1,059 from holding Macquarie Group Ltd or generate 11.31% 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. Garda Diversified Ppty
Performance |
| Timeline |
| Macquarie Group |
| Garda Diversified Ppty |
Macquarie Group and Garda Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and Garda Diversified
The main advantage of trading using opposite Macquarie Group and Garda Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, Garda Diversified 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 Garda Diversified will offset losses from the drop in Garda Diversified's long position.| Macquarie Group vs. Land Homes Group | Macquarie Group vs. WiseTech Global Limited | Macquarie Group vs. Ras Technology Holdings | Macquarie Group vs. Neurotech International |
| Garda Diversified vs. Scentre Group | Garda Diversified vs. Vicinity Centres Re | Garda Diversified vs. Charter Hall Retail | Garda Diversified vs. Cromwell Property 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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