Correlation Between Macquarie Group and Platinum Asset
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and Platinum 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 Platinum 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 Platinum Asset Management, you can compare the effects of market volatilities on Macquarie Group and Platinum 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 Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and Platinum Asset.
Diversification Opportunities for Macquarie Group and Platinum Asset
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Platinum is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and Platinum Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asset Management 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 Platinum Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asset Management has no effect on the direction of Macquarie Group i.e., Macquarie Group and Platinum Asset go up and down completely randomly.
Pair Corralation between Macquarie Group and Platinum Asset
Assuming the 90 days trading horizon Macquarie Group Ltd is expected to under-perform the Platinum Asset. But the preferred stock apears to be less risky and, when comparing its historical volatility, Macquarie Group Ltd is 17.82 times less risky than Platinum Asset. The preferred stock trades about -0.08 of its potential returns per unit of risk. The Platinum Asset Management is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 67.00 in Platinum Asset Management on October 22, 2024 and sell it today you would earn a total of 2.00 from holding Platinum Asset Management or generate 2.99% 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. Platinum Asset Management
Performance |
| Timeline |
| Macquarie Group |
| Platinum Asset Management |
Macquarie Group and Platinum Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and Platinum Asset
The main advantage of trading using opposite Macquarie Group and Platinum Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, Platinum 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 Platinum Asset will offset losses from the drop in Platinum Asset's long position.| Macquarie Group vs. Black Rock Mining | Macquarie Group vs. Oneview Healthcare PLC | Macquarie Group vs. Perseus Mining | Macquarie Group vs. DMC Mining |
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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 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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