Correlation Between Polymetals Resources and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Polymetals Resources 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 Polymetals Resources and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polymetals Resources and Macquarie Bank Limited, you can compare the effects of market volatilities on Polymetals Resources 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 Polymetals Resources with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polymetals Resources and Macquarie Bank.
Diversification Opportunities for Polymetals Resources and Macquarie Bank
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polymetals and Macquarie is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Polymetals Resources and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Polymetals Resources 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 Polymetals Resources 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 Polymetals Resources i.e., Polymetals Resources and Macquarie Bank go up and down completely randomly.
Pair Corralation between Polymetals Resources and Macquarie Bank
Assuming the 90 days trading horizon Polymetals Resources is expected to generate 10.92 times more return on investment than Macquarie Bank. However, Polymetals Resources is 10.92 times more volatile than Macquarie Bank Limited. It trades about 0.04 of its potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.06 per unit of risk. If you would invest 68.00 in Polymetals Resources on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Polymetals Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polymetals Resources vs. Macquarie Bank Limited
Performance |
| Timeline |
| Polymetals Resources |
| Macquarie Bank |
Polymetals Resources and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polymetals Resources and Macquarie Bank
The main advantage of trading using opposite Polymetals Resources and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polymetals Resources 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.| Polymetals Resources vs. Northern Star Resources | Polymetals Resources vs. Evolution Mining | Polymetals Resources vs. Bluescope Steel | Polymetals Resources vs. De Grey Mining |
| Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Polymetals Resources | Macquarie Bank vs. Ecofibre | Macquarie Bank vs. iShares Global 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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