Correlation Between Truscott Mining and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both Truscott Mining and Macquarie Group 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 Truscott Mining and Macquarie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truscott Mining Corp and Macquarie Group Ltd, you can compare the effects of market volatilities on Truscott Mining and Macquarie Group 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 Truscott Mining with a short position of Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truscott Mining and Macquarie Group.
Diversification Opportunities for Truscott Mining and Macquarie Group
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Truscott and Macquarie is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Truscott Mining Corp and Macquarie Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Truscott Mining 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 Truscott Mining Corp are associated (or correlated) with Macquarie Group. 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 Truscott Mining i.e., Truscott Mining and Macquarie Group go up and down completely randomly.
Pair Corralation between Truscott Mining and Macquarie Group
Assuming the 90 days trading horizon Truscott Mining Corp is expected to generate 16.88 times more return on investment than Macquarie Group. However, Truscott Mining is 16.88 times more volatile than Macquarie Group Ltd. It trades about 0.11 of its potential returns per unit of risk. Macquarie Group Ltd is currently generating about -0.03 per unit of risk. If you would invest 7.80 in Truscott Mining Corp on November 7, 2024 and sell it today you would earn a total of 0.70 from holding Truscott Mining Corp or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truscott Mining Corp vs. Macquarie Group Ltd
Performance |
| Timeline |
| Truscott Mining Corp |
| Macquarie Group |
Truscott Mining and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truscott Mining and Macquarie Group
The main advantage of trading using opposite Truscott Mining and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truscott Mining position performs unexpectedly, Macquarie Group 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 Group will offset losses from the drop in Macquarie Group's long position.| Truscott Mining vs. Technology One | Truscott Mining vs. High Tech Metals | Truscott Mining vs. Queste Communications | Truscott Mining vs. Aussie Broadband |
| Macquarie Group vs. Clime Investment Management | Macquarie Group vs. Flagship Investments | Macquarie Group vs. Auctus Alternative Investments | Macquarie Group vs. Aurelia Metals |
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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