Correlation Between GOODTECH ASA and Macerich

Can any of the company-specific risk be diversified away by investing in both GOODTECH ASA and Macerich 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 GOODTECH ASA and Macerich into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GOODTECH ASA A and The Macerich, you can compare the effects of market volatilities on GOODTECH ASA and Macerich 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 GOODTECH ASA with a short position of Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOODTECH ASA and Macerich.

Diversification Opportunities for GOODTECH ASA and Macerich

-0.64

Correlation Coefficient

GOODTECH ASA  Macerich

Excellent diversification

The 3 months correlation between GOODTECH and Macerich is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding GOODTECH ASA A and The Macerich in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich and GOODTECH ASA 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 GOODTECH ASA A are associated (or correlated) with Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of GOODTECH ASA i.e., GOODTECH ASA and Macerich go up and down completely randomly.

Pair Corralation between GOODTECH ASA and Macerich

Assuming the 90 days horizon GOODTECH ASA A is expected to generate 0.81 times more return on investment than Macerich. However, GOODTECH ASA A is 1.24 times less risky than Macerich. It trades about 0.39 of its potential returns per unit of risk. The Macerich is currently generating about -0.02 per unit of risk. If you would invest  76.00  in GOODTECH ASA A on September 27, 2024 and sell it today you would earn a total of  10.00  from holding GOODTECH ASA A or generate 13.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

GOODTECH ASA A  vs.  The Macerich

GOODTECH ASA A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GOODTECH ASA A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Macerich

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Macerich are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Macerich reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GOODTECH ASA and Macerich

The main advantage of trading using opposite GOODTECH ASA and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOODTECH ASA position performs unexpectedly, Macerich 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 Macerich will offset losses from the drop in Macerich's long position.

The idea behind GOODTECH ASA A and The Macerich pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.