Correlation Between Macquarie Group and Medical Developments
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and Medical Developments 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 Medical Developments 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 Medical Developments International, you can compare the effects of market volatilities on Macquarie Group and Medical Developments 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 Medical Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and Medical Developments.
Diversification Opportunities for Macquarie Group and Medical Developments
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Macquarie and Medical is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and Medical Developments Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Developments 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 Medical Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Developments has no effect on the direction of Macquarie Group i.e., Macquarie Group and Medical Developments go up and down completely randomly.
Pair Corralation between Macquarie Group and Medical Developments
Assuming the 90 days trading horizon Macquarie Group Ltd is expected to generate 0.1 times more return on investment than Medical Developments. However, Macquarie Group Ltd is 10.36 times less risky than Medical Developments. It trades about 0.05 of its potential returns per unit of risk. Medical Developments International is currently generating about -0.04 per unit of risk. If you would invest 9,359 in Macquarie Group Ltd on September 14, 2024 and sell it today you would earn a total of 1,041 from holding Macquarie Group Ltd or generate 11.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group Ltd vs. Medical Developments Internati
Performance |
| Timeline |
| Macquarie Group |
| Medical Developments |
Macquarie Group and Medical Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and Medical Developments
The main advantage of trading using opposite Macquarie Group and Medical Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, Medical Developments 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 Medical Developments will offset losses from the drop in Medical Developments' long position.| Macquarie Group vs. Healthco Healthcare and | Macquarie Group vs. Auctus Alternative Investments | Macquarie Group vs. BKI Investment | Macquarie Group vs. Austco Healthcare |
| Medical Developments vs. Aneka Tambang Tbk | Medical Developments vs. BHP Group Limited | Medical Developments vs. Rio Tinto | Medical Developments vs. Macquarie Group Ltd |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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