Correlation Between Macquarie Technology and Everest Metals

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

Diversification Opportunities for Macquarie Technology and Everest Metals

-0.81

Correlation Coefficient

Macquarie Technology  Everest Metals

Pay attention - limited upside

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

Pair Corralation between Macquarie Technology and Everest Metals

Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the Everest Metals. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Technology Group is 2.85 times less risky than Everest Metals. The stock trades about -0.23 of its potential returns per unit of risk. The Everest Metals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Everest Metals on December 23, 2024 and sell it today you would earn a total of  3.00  from holding Everest Metals or generate 23.08% return on investment over 90 days.

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

Macquarie Technology Group  vs.  Everest Metals

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.

Everest Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Everest Metals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Everest Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Macquarie Technology and Everest Metals

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

The idea behind Macquarie Technology Group and Everest Metals 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.