Correlation Between Macquarie Technology and Ambertech

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

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

Diversification Opportunities for Macquarie Technology and Ambertech

0.13

Correlation Coefficient

Macquarie Technology  Ambertech

Average diversification

The 3 months correlation between Macquarie and Ambertech is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Ambertech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambertech and Macquarie Technology 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 Macquarie Technology Group are associated (or correlated) with Ambertech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambertech has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Ambertech go up and down completely randomly.

Pair Corralation between Macquarie Technology and Ambertech

Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the Ambertech. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Technology Group is 3.12 times less risky than Ambertech. The stock trades about -0.24 of its potential returns per unit of risk. The Ambertech is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Ambertech on December 24, 2024 and sell it today you would earn a total of  1.00  from holding Ambertech or generate 6.25% return on investment over 90 days.

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

Macquarie Technology Group  vs.  Ambertech

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.

Ambertech

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ambertech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ambertech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Macquarie Technology and Ambertech

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

The idea behind Macquarie Technology Group and Ambertech 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.