Correlation Between Sky Metals and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Sky Metals 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 Sky Metals and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sky Metals and Macquarie Bank Limited, you can compare the effects of market volatilities on Sky Metals 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 Sky Metals with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky Metals and Macquarie Bank.
Diversification Opportunities for Sky Metals and Macquarie Bank
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sky and Macquarie is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sky Metals and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Sky Metals 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 Sky Metals 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 Sky Metals i.e., Sky Metals and Macquarie Bank go up and down completely randomly.
Pair Corralation between Sky Metals and Macquarie Bank
Assuming the 90 days trading horizon Sky Metals is expected to under-perform the Macquarie Bank. In addition to that, Sky Metals is 5.79 times more volatile than Macquarie Bank Limited. It trades about -0.05 of its total potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.02 per unit of volatility. If you would invest 10,379 in Macquarie Bank Limited on September 1, 2024 and sell it today you would earn a total of 22.00 from holding Macquarie Bank Limited or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sky Metals vs. Macquarie Bank Limited
Performance |
| Timeline |
| Sky Metals |
| Macquarie Bank |
Sky Metals and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sky Metals and Macquarie Bank
The main advantage of trading using opposite Sky Metals and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky Metals 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.| Sky Metals vs. Carnegie Clean Energy | Sky Metals vs. Nufarm Finance NZ | Sky Metals vs. Richmond Vanadium Technology | Sky Metals vs. Macquarie Technology Group |
| Macquarie Bank vs. NEWMONT PORATION CDI | Macquarie Bank vs. Ssr Mining | Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Black Cat Syndicate |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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