Correlation Between Macquarie Group and OOhMedia
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and OOhMedia 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 OOhMedia 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 oOhMedia, you can compare the effects of market volatilities on Macquarie Group and OOhMedia 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 OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and OOhMedia.
Diversification Opportunities for Macquarie Group and OOhMedia
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macquarie and OOhMedia is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia 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 OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Macquarie Group i.e., Macquarie Group and OOhMedia go up and down completely randomly.
Pair Corralation between Macquarie Group and OOhMedia
Assuming the 90 days trading horizon Macquarie Group is expected to generate 1.08 times less return on investment than OOhMedia. But when comparing it to its historical volatility, Macquarie Group Ltd is 5.69 times less risky than OOhMedia. It trades about 0.06 of its potential returns per unit of risk. oOhMedia is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 153.00 in oOhMedia on November 28, 2024 and sell it today you would lose (1.00) from holding oOhMedia or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group Ltd vs. oOhMedia
Performance |
| Timeline |
| Macquarie Group |
| oOhMedia |
Macquarie Group and OOhMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and OOhMedia
The main advantage of trading using opposite Macquarie Group and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, OOhMedia 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 OOhMedia will offset losses from the drop in OOhMedia's long position.| Macquarie Group vs. Sky Metals | Macquarie Group vs. Centaurus Metals | Macquarie Group vs. Tambourah Metals | Macquarie Group vs. Olympio Metals |
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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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