Correlation Between Macquarie Group and Xref
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and Xref 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 Xref 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 Xref, you can compare the effects of market volatilities on Macquarie Group and Xref 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 Xref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and Xref.
Diversification Opportunities for Macquarie Group and Xref
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macquarie and Xref is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and Xref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xref 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 Xref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xref has no effect on the direction of Macquarie Group i.e., Macquarie Group and Xref go up and down completely randomly.
Pair Corralation between Macquarie Group and Xref
Assuming the 90 days trading horizon Macquarie Group is expected to generate 14.57 times less return on investment than Xref. But when comparing it to its historical volatility, Macquarie Group Ltd is 13.87 times less risky than Xref. It trades about 0.06 of its potential returns per unit of risk. Xref is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Xref on September 14, 2024 and sell it today you would earn a total of 9.00 from holding Xref or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Macquarie Group Ltd vs. Xref
Performance |
| Timeline |
| Macquarie Group |
| Xref |
Macquarie Group and Xref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and Xref
The main advantage of trading using opposite Macquarie Group and Xref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, Xref 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 Xref will offset losses from the drop in Xref's long position.| Macquarie Group vs. Healthco Healthcare and | Macquarie Group vs. Auctus Alternative Investments | Macquarie Group vs. BKI Investment | Macquarie Group vs. Austco Healthcare |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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