Correlation Between Macquarie Group and Microequities Asset
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and Microequities Asset 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 Microequities Asset 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 Microequities Asset Management, you can compare the effects of market volatilities on Macquarie Group and Microequities Asset 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 Microequities Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and Microequities Asset.
Diversification Opportunities for Macquarie Group and Microequities Asset
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Microequities is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and Microequities Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microequities Asset 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 Microequities Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microequities Asset has no effect on the direction of Macquarie Group i.e., Macquarie Group and Microequities Asset go up and down completely randomly.
Pair Corralation between Macquarie Group and Microequities Asset
Assuming the 90 days trading horizon Macquarie Group Ltd is expected to generate 0.43 times more return on investment than Microequities Asset. However, Macquarie Group Ltd is 2.32 times less risky than Microequities Asset. It trades about 0.05 of its potential returns per unit of risk. Microequities Asset Management is currently generating about 0.01 per unit of risk. If you would invest 10,367 in Macquarie Group Ltd on September 25, 2024 and sell it today you would earn a total of 58.00 from holding Macquarie Group Ltd or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Macquarie Group Ltd vs. Microequities Asset Management
Performance |
| Timeline |
| Macquarie Group |
| Microequities Asset |
Macquarie Group and Microequities Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and Microequities Asset
The main advantage of trading using opposite Macquarie Group and Microequities Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, Microequities Asset 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 Microequities Asset will offset losses from the drop in Microequities Asset's long position.| Macquarie Group vs. Dicker Data | Macquarie Group vs. Global Data Centre | Macquarie Group vs. Globe Metals Mining | Macquarie Group vs. ABACUS STORAGE KING |
| Microequities Asset vs. Aneka Tambang Tbk | Microequities Asset vs. Macquarie Group | Microequities Asset vs. Macquarie Group Ltd | Microequities Asset vs. Challenger |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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