Correlation Between EMvision Medical and Macquarie Technology

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

By analyzing existing cross correlation between EMvision Medical Devices and Macquarie Technology Group, you can compare the effects of market volatilities on EMvision Medical and Macquarie Technology 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 EMvision Medical with a short position of Macquarie Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMvision Medical and Macquarie Technology.

Diversification Opportunities for EMvision Medical and Macquarie Technology

0.14

Correlation Coefficient

EMvision Medical  Macquarie Technology

Average diversification

The 3 months correlation between EMvision and Macquarie is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding EMvision Medical Devices and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology and EMvision Medical 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 EMvision Medical Devices are associated (or correlated) with Macquarie Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Technology has no effect on the direction of EMvision Medical i.e., EMvision Medical and Macquarie Technology go up and down completely randomly.

Pair Corralation between EMvision Medical and Macquarie Technology

Assuming the 90 days trading horizon EMvision Medical Devices is expected to generate 1.74 times more return on investment than Macquarie Technology. However, EMvision Medical is 1.74 times more volatile than Macquarie Technology Group. It trades about 0.05 of its potential returns per unit of risk. Macquarie Technology Group is currently generating about -0.24 per unit of risk. If you would invest  188.00  in EMvision Medical Devices on December 24, 2024 and sell it today you would earn a total of  11.00  from holding EMvision Medical Devices or generate 5.85% return on investment over 90 days.

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

EMvision Medical Devices  vs.  Macquarie Technology Group

EMvision Medical Devices

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EMvision Medical Devices are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EMvision Medical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Macquarie Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Macquarie Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with EMvision Medical and Macquarie Technology

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

The idea behind EMvision Medical Devices and Macquarie Technology Group 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.