Correlation Between WiseTech Global and Macquarie
Can any of the company-specific risk be diversified away by investing in both WiseTech Global 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 WiseTech Global and Macquarie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WiseTech Global Limited and Macquarie Group, you can compare the effects of market volatilities on WiseTech Global 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 WiseTech Global with a short position of Macquarie. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiseTech Global and Macquarie.
Diversification Opportunities for WiseTech Global and Macquarie
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between WiseTech and Macquarie is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding WiseTech Global Limited and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and WiseTech Global 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 WiseTech Global Limited 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 WiseTech Global i.e., WiseTech Global and Macquarie go up and down completely randomly.
Pair Corralation between WiseTech Global and Macquarie
Assuming the 90 days trading horizon WiseTech Global is expected to generate 1.12 times less return on investment than Macquarie. In addition to that, WiseTech Global is 2.9 times more volatile than Macquarie Group. It trades about 0.04 of its total potential returns per unit of risk. Macquarie Group is currently generating about 0.13 per unit of volatility. If you would invest 21,219 in Macquarie Group on August 29, 2024 and sell it today you would earn a total of 2,025 from holding Macquarie Group or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WiseTech Global Limited vs. Macquarie Group
Performance |
| Timeline |
| WiseTech Global |
| Macquarie Group |
WiseTech Global and Macquarie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WiseTech Global and Macquarie
The main advantage of trading using opposite WiseTech Global and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiseTech Global 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.| WiseTech Global vs. PVW Resources | WiseTech Global vs. Woolworths | WiseTech Global vs. Wesfarmers | WiseTech Global vs. Coles Group |
| Macquarie vs. Charter Hall Retail | Macquarie vs. Centaurus Metals | Macquarie vs. Spirit Telecom | Macquarie vs. Perseus Mining |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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