Correlation Between Macquarie Group and IXUP
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and IXUP 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 IXUP 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 IXUP, you can compare the effects of market volatilities on Macquarie Group and IXUP 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 IXUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and IXUP.
Diversification Opportunities for Macquarie Group and IXUP
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and IXUP is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and IXUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IXUP 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 IXUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IXUP has no effect on the direction of Macquarie Group i.e., Macquarie Group and IXUP go up and down completely randomly.
Pair Corralation between Macquarie Group and IXUP
Assuming the 90 days trading horizon Macquarie Group is expected to generate 2.32 times less return on investment than IXUP. But when comparing it to its historical volatility, Macquarie Group Ltd is 17.33 times less risky than IXUP. It trades about 0.27 of its potential returns per unit of risk. IXUP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.10 in IXUP on September 1, 2024 and sell it today you would earn a total of 0.00 from holding IXUP or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Macquarie Group Ltd vs. IXUP
Performance |
| Timeline |
| Macquarie Group |
| IXUP |
Macquarie Group and IXUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and IXUP
The main advantage of trading using opposite Macquarie Group and IXUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, IXUP 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 IXUP will offset losses from the drop in IXUP's long position.| Macquarie Group vs. Premier Investments | Macquarie Group vs. Carlton Investments | Macquarie Group vs. Retail Food Group | Macquarie Group vs. Carnegie Clean Energy |
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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