Correlation Between INSURANCE AUST and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and Macquarie Group 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 INSURANCE AUST and Macquarie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSURANCE AUST GRP and Macquarie Group Limited, you can compare the effects of market volatilities on INSURANCE AUST and Macquarie Group 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 INSURANCE AUST with a short position of Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and Macquarie Group.
Diversification Opportunities for INSURANCE AUST and Macquarie Group
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between INSURANCE and Macquarie is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and Macquarie Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and INSURANCE AUST 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 INSURANCE AUST GRP are associated (or correlated) with Macquarie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and Macquarie Group go up and down completely randomly.
Pair Corralation between INSURANCE AUST and Macquarie Group
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 1.37 times more return on investment than Macquarie Group. However, INSURANCE AUST is 1.37 times more volatile than Macquarie Group Limited. It trades about 0.08 of its potential returns per unit of risk. Macquarie Group Limited is currently generating about -0.06 per unit of risk. If you would invest 482.00 in INSURANCE AUST GRP on October 16, 2024 and sell it today you would earn a total of 23.00 from holding INSURANCE AUST GRP or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.37% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. Macquarie Group Limited
Performance |
| Timeline |
| INSURANCE AUST GRP |
| Macquarie Group |
INSURANCE AUST and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and Macquarie Group
The main advantage of trading using opposite INSURANCE AUST and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, Macquarie Group 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 Macquarie Group will offset losses from the drop in Macquarie Group's long position.| INSURANCE AUST vs. NXP Semiconductors NV | INSURANCE AUST vs. MOBILE FACTORY INC | INSURANCE AUST vs. T MOBILE INCDL 00001 | INSURANCE AUST vs. BE Semiconductor Industries |
| Macquarie Group vs. INSURANCE AUST GRP | Macquarie Group vs. Hyster Yale Materials Handling | Macquarie Group vs. Goodyear Tire Rubber | Macquarie Group vs. Summit Materials |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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