Correlation Between Macquarie Group and X2M Connect
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and X2M Connect 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 X2M Connect 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 X2M Connect, you can compare the effects of market volatilities on Macquarie Group and X2M Connect 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 X2M Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and X2M Connect.
Diversification Opportunities for Macquarie Group and X2M Connect
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Macquarie and X2M is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and X2M Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X2M Connect 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 X2M Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X2M Connect has no effect on the direction of Macquarie Group i.e., Macquarie Group and X2M Connect go up and down completely randomly.
Pair Corralation between Macquarie Group and X2M Connect
Assuming the 90 days trading horizon Macquarie Group Ltd is expected to generate 0.13 times more return on investment than X2M Connect. However, Macquarie Group Ltd is 7.71 times less risky than X2M Connect. It trades about 0.06 of its potential returns per unit of risk. X2M Connect is currently generating about -0.04 per unit of risk. If you would invest 10,365 in Macquarie Group Ltd on August 30, 2024 and sell it today you would earn a total of 335.00 from holding Macquarie Group Ltd or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.66% |
| Values | Daily Returns |
Macquarie Group Ltd vs. X2M Connect
Performance |
| Timeline |
| Macquarie Group |
| X2M Connect |
Macquarie Group and X2M Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and X2M Connect
The main advantage of trading using opposite Macquarie Group and X2M Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, X2M Connect 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 X2M Connect will offset losses from the drop in X2M Connect's long position.| Macquarie Group vs. Centaurus Metals | Macquarie Group vs. Carlton Investments | Macquarie Group vs. Alternative Investment Trust | Macquarie Group vs. BKI Investment |
| X2M Connect vs. Hudson Investment Group | X2M Connect vs. Garda Diversified Ppty | X2M Connect vs. Advanced Braking Technology | X2M Connect vs. A1 Investments Resources |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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