Correlation Between Ora Banda and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Ora Banda and Macquarie Bank 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 Ora Banda and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ora Banda Mining and Macquarie Bank Limited, you can compare the effects of market volatilities on Ora Banda and Macquarie Bank 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 Ora Banda with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ora Banda and Macquarie Bank.
Diversification Opportunities for Ora Banda and Macquarie Bank
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ora and Macquarie is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ora Banda Mining and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Ora Banda 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 Ora Banda Mining are associated (or correlated) with Macquarie Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Bank has no effect on the direction of Ora Banda i.e., Ora Banda and Macquarie Bank go up and down completely randomly.
Pair Corralation between Ora Banda and Macquarie Bank
Assuming the 90 days trading horizon Ora Banda Mining is expected to under-perform the Macquarie Bank. In addition to that, Ora Banda is 6.59 times more volatile than Macquarie Bank Limited. It trades about -0.31 of its total potential returns per unit of risk. Macquarie Bank Limited is currently generating about -0.09 per unit of volatility. If you would invest 10,404 in Macquarie Bank Limited on August 29, 2024 and sell it today you would lose (140.00) from holding Macquarie Bank Limited or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ora Banda Mining vs. Macquarie Bank Limited
Performance |
| Timeline |
| Ora Banda Mining |
| Macquarie Bank |
Ora Banda and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ora Banda and Macquarie Bank
The main advantage of trading using opposite Ora Banda and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ora Banda position performs unexpectedly, Macquarie Bank 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 Bank will offset losses from the drop in Macquarie Bank's long position.| Ora Banda vs. Northern Star Resources | Ora Banda vs. Evolution Mining | Ora Banda vs. Bluescope Steel | Ora Banda vs. Sandfire Resources NL |
| Macquarie Bank vs. Richmond Vanadium Technology | Macquarie Bank vs. Navigator Global Investments | Macquarie Bank vs. Regal Investment | Macquarie Bank vs. Ainsworth Game Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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