Correlation Between Macquarie Technology and Dug Technology Ltd

Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Dug Technology Ltd 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 Dug Technology Ltd 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 Dug Technology, you can compare the effects of market volatilities on Macquarie Technology and Dug Technology Ltd 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 Dug Technology Ltd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Dug Technology Ltd.

Diversification Opportunities for Macquarie Technology and Dug Technology Ltd

0.66

Correlation Coefficient

Macquarie Technology  Dug Technology Ltd

Poor diversification

The 3 months correlation between Macquarie and Dug is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Dug Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dug Technology Ltd 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 Dug Technology Ltd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dug Technology Ltd has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Dug Technology Ltd go up and down completely randomly.

Pair Corralation between Macquarie Technology and Dug Technology Ltd

Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the Dug Technology Ltd. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Technology Group is 3.18 times less risky than Dug Technology Ltd. The stock trades about -0.22 of its potential returns per unit of risk. The Dug Technology is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  118.00  in Dug Technology on December 30, 2024 and sell it today you would lose (6.00) from holding Dug Technology or give up 5.08% of portfolio value over 90 days.

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

Macquarie Technology Group  vs.  Dug Technology

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.

Dug Technology Ltd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dug Technology 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 Macquarie Technology and Dug Technology Ltd

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

The idea behind Macquarie Technology Group and Dug Technology 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.