Correlation Between Spirit Telecom and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both Spirit Telecom 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 Spirit Telecom and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirit Telecom and Macquarie Bank Limited, you can compare the effects of market volatilities on Spirit Telecom 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 Spirit Telecom with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirit Telecom and Macquarie Bank.
Diversification Opportunities for Spirit Telecom and Macquarie Bank
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Spirit and Macquarie is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Telecom and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and Spirit Telecom 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 Spirit Telecom 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 Spirit Telecom i.e., Spirit Telecom and Macquarie Bank go up and down completely randomly.
Pair Corralation between Spirit Telecom and Macquarie Bank
Assuming the 90 days trading horizon Spirit Telecom is expected to generate 8.8 times more return on investment than Macquarie Bank. However, Spirit Telecom is 8.8 times more volatile than Macquarie Bank Limited. It trades about 0.07 of its potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.09 per unit of risk. If you would invest 4.30 in Spirit Telecom on August 30, 2024 and sell it today you would earn a total of 1.20 from holding Spirit Telecom or generate 27.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirit Telecom vs. Macquarie Bank Limited
Performance |
| Timeline |
| Spirit Telecom |
| Macquarie Bank |
Spirit Telecom and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirit Telecom and Macquarie Bank
The main advantage of trading using opposite Spirit Telecom and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirit Telecom 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.| Spirit Telecom vs. Tlou Energy | Spirit Telecom vs. Encounter Resources | Spirit Telecom vs. Southern Cross Gold | Spirit Telecom vs. Minbos Resources |
| Macquarie Bank vs. Ssr Mining | Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Black Cat Syndicate | Macquarie Bank vs. Ecofibre |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |