Correlation Between Sports Entertainment and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Sports Entertainment 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 Sports Entertainment and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sports Entertainment Group and Macquarie Bank Limited, you can compare the effects of market volatilities on Sports Entertainment 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 Sports Entertainment with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sports Entertainment and Macquarie Bank.
Diversification Opportunities for Sports Entertainment and Macquarie Bank
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sports and Macquarie is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sports Entertainment Group and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Sports Entertainment 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 Sports Entertainment Group 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 Sports Entertainment i.e., Sports Entertainment and Macquarie Bank go up and down completely randomly.
Pair Corralation between Sports Entertainment and Macquarie Bank
Assuming the 90 days trading horizon Sports Entertainment Group is expected to generate 10.98 times more return on investment than Macquarie Bank. However, Sports Entertainment is 10.98 times more volatile than Macquarie Bank Limited. It trades about 0.03 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 22.00 in Sports Entertainment Group on October 16, 2024 and sell it today you would earn a total of 1.00 from holding Sports Entertainment Group or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sports Entertainment Group vs. Macquarie Bank Limited
Performance |
| Timeline |
| Sports Entertainment |
| Macquarie Bank |
Sports Entertainment and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sports Entertainment and Macquarie Bank
The main advantage of trading using opposite Sports Entertainment and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sports Entertainment 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.| Sports Entertainment vs. Queste Communications | Sports Entertainment vs. TPG Telecom | Sports Entertainment vs. Centuria Industrial Reit | Sports Entertainment vs. Super Retail Group |
| Macquarie Bank vs. Sports Entertainment Group | Macquarie Bank vs. Queste Communications | Macquarie Bank vs. Balkan Mining and | Macquarie Bank vs. Infomedia |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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