Correlation Between Summerset Group and Macquarie
Can any of the company-specific risk be diversified away by investing in both Summerset Group and Macquarie 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 Summerset Group and Macquarie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summerset Group Holdings and Macquarie Group, you can compare the effects of market volatilities on Summerset Group and Macquarie 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 Summerset Group with a short position of Macquarie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summerset Group and Macquarie.
Diversification Opportunities for Summerset Group and Macquarie
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Summerset and Macquarie is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Summerset Group Holdings and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Summerset Group 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 Summerset Group Holdings are associated (or correlated) with Macquarie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Summerset Group i.e., Summerset Group and Macquarie go up and down completely randomly.
Pair Corralation between Summerset Group and Macquarie
Assuming the 90 days trading horizon Summerset Group is expected to generate 1.84 times less return on investment than Macquarie. But when comparing it to its historical volatility, Summerset Group Holdings is 1.03 times less risky than Macquarie. It trades about 0.14 of its potential returns per unit of risk. Macquarie Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 21,975 in Macquarie Group on September 5, 2024 and sell it today you would earn a total of 1,388 from holding Macquarie Group or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summerset Group Holdings vs. Macquarie Group
Performance |
| Timeline |
| Summerset Group Holdings |
| Macquarie Group |
Summerset Group and Macquarie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summerset Group and Macquarie
The main advantage of trading using opposite Summerset Group and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summerset Group position performs unexpectedly, Macquarie 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 will offset losses from the drop in Macquarie's long position.| Summerset Group vs. Macquarie Group | Summerset Group vs. Macquarie Group Ltd | Summerset Group vs. Commonwealth Bank | Summerset Group vs. Rio Tinto |
| Macquarie vs. Dug Technology | Macquarie vs. Qbe Insurance Group | Macquarie vs. BSP Financial Group | Macquarie vs. Magellan Financial Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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