Correlation Between Embark Education and Macquarie

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

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

Diversification Opportunities for Embark Education and Macquarie

0.29

Correlation Coefficient

Embark Education  Macquarie

Modest diversification

The 3 months correlation between Embark and Macquarie is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Embark Education Group and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Embark Education 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 Embark Education Group 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 Embark Education i.e., Embark Education and Macquarie go up and down completely randomly.

Pair Corralation between Embark Education and Macquarie

Assuming the 90 days trading horizon Embark Education Group is expected to generate 0.83 times more return on investment than Macquarie. However, Embark Education Group is 1.2 times less risky than Macquarie. It trades about 0.01 of its potential returns per unit of risk. Macquarie Group is currently generating about -0.11 per unit of risk. If you would invest  75.00  in Embark Education Group on December 22, 2024 and sell it today you would earn a total of  0.00  from holding Embark Education Group or generate 0.0% return on investment over 90 days.

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

Embark Education Group  vs.  Macquarie Group

Embark Education

Risk-Adjusted Performance

Very Weak

Over the last 90 days Embark Education Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Embark Education is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Macquarie Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Macquarie Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Embark Education and Macquarie

The main advantage of trading using opposite Embark Education and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embark Education 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.

The idea behind Embark Education Group and Macquarie 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.