Correlation Between Macquarie Group and Lindian Resources
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and Lindian Resources 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 Lindian Resources 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 Lindian Resources, you can compare the effects of market volatilities on Macquarie Group and Lindian Resources 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 Lindian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and Lindian Resources.
Diversification Opportunities for Macquarie Group and Lindian Resources
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Macquarie and Lindian is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and Lindian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindian Resources 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 Lindian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindian Resources has no effect on the direction of Macquarie Group i.e., Macquarie Group and Lindian Resources go up and down completely randomly.
Pair Corralation between Macquarie Group and Lindian Resources
Assuming the 90 days trading horizon Macquarie Group is expected to generate 7.13 times less return on investment than Lindian Resources. But when comparing it to its historical volatility, Macquarie Group Ltd is 14.44 times less risky than Lindian Resources. It trades about 0.05 of its potential returns per unit of risk. Lindian Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Lindian Resources on October 31, 2024 and sell it today you would earn a total of 0.00 from holding Lindian Resources or generate 0.0% 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. Lindian Resources
Performance |
| Timeline |
| Macquarie Group |
| Lindian Resources |
Macquarie Group and Lindian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and Lindian Resources
The main advantage of trading using opposite Macquarie Group and Lindian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, Lindian Resources 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 Lindian Resources will offset losses from the drop in Lindian Resources' long position.| Macquarie Group vs. Auctus Alternative Investments | Macquarie Group vs. Actinogen Medical | Macquarie Group vs. Flagship Investments | Macquarie Group vs. Diversified United Investment |
| Lindian Resources vs. Centaurus Metals | Lindian Resources vs. Truscott Mining Corp | Lindian Resources vs. Queste Communications | Lindian Resources vs. Beam Communications Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |