Correlation Between Pinnacle Investment and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Pinnacle Investment 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 Pinnacle Investment and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Investment Management and Macquarie Bank Limited, you can compare the effects of market volatilities on Pinnacle Investment 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 Pinnacle Investment with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Investment and Macquarie Bank.
Diversification Opportunities for Pinnacle Investment and Macquarie Bank
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pinnacle and Macquarie is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Investment Management and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Pinnacle Investment 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 Pinnacle Investment Management 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 Pinnacle Investment i.e., Pinnacle Investment and Macquarie Bank go up and down completely randomly.
Pair Corralation between Pinnacle Investment and Macquarie Bank
Assuming the 90 days trading horizon Pinnacle Investment Management is expected to generate 3.04 times more return on investment than Macquarie Bank. However, Pinnacle Investment is 3.04 times more volatile than Macquarie Bank Limited. It trades about 0.35 of its potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.03 per unit of risk. If you would invest 2,024 in Pinnacle Investment Management on September 3, 2024 and sell it today you would earn a total of 320.00 from holding Pinnacle Investment Management or generate 15.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinnacle Investment Management vs. Macquarie Bank Limited
Performance |
| Timeline |
| Pinnacle Investment |
| Macquarie Bank |
Pinnacle Investment and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Investment and Macquarie Bank
The main advantage of trading using opposite Pinnacle Investment and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Investment 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.| Pinnacle Investment vs. Audio Pixels Holdings | Pinnacle Investment vs. Iodm | Pinnacle Investment vs. Nsx | Pinnacle Investment vs. TTG Fintech |
| Macquarie Bank vs. NEWMONT PORATION CDI | Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Polymetals Resources | Macquarie Bank vs. Champion Iron |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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