Correlation Between Alphabet and Macquarie Global

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

By analyzing existing cross correlation between Alphabet Inc Class C and Macquarie Global Infrastructure, you can compare the effects of market volatilities on Alphabet and Macquarie Global 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 Alphabet with a short position of Macquarie Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Macquarie Global.

Diversification Opportunities for Alphabet and Macquarie Global

-0.81

Correlation Coefficient

Alphabet  Macquarie Global

Pay attention - limited upside

The 3 months correlation between Alphabet and Macquarie is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Macquarie Global Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Global Inf and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Macquarie Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Global Inf has no effect on the direction of Alphabet i.e., Alphabet and Macquarie Global go up and down completely randomly.

Pair Corralation between Alphabet and Macquarie Global

If you would invest  16,420  in Alphabet Inc Class C on October 5, 2024 and sell it today you would earn a total of  2,643  from holding Alphabet Inc Class C or generate 16.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.61%
Values	Daily Returns

Alphabet Inc Class C  vs.  Macquarie Global Infrastructur

Alphabet Class C

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class C are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Alphabet reported solid returns over the last few months and may actually be approaching a breakup point.

Macquarie Global Inf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macquarie Global Infrastructure has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable technical and fundamental indicators, Macquarie Global is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Alphabet and Macquarie Global

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

The idea behind Alphabet Inc Class C and Macquarie Global Infrastructure 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.