Correlation Between Macquarie Technology and Greentech Metals

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

Diversification Opportunities for Macquarie Technology and Greentech Metals

-0.47
  Correlation Coefficient

Very good diversification

The 3 months correlation between Macquarie and Greentech is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Greentech Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greentech 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 Greentech Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greentech Metals has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Greentech Metals go up and down completely randomly.

Pair Corralation between Macquarie Technology and Greentech Metals

Assuming the 90 days trading horizon Macquarie Technology is expected to generate 5.6 times less return on investment than Greentech Metals. But when comparing it to its historical volatility, Macquarie Technology Group is 7.99 times less risky than Greentech Metals. It trades about 0.05 of its potential returns per unit of risk. Greentech Metals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Greentech Metals on October 4, 2024 and sell it today you would lose (7.00) from holding Greentech Metals or give up 50.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Macquarie Technology Group  vs.  Greentech Metals

 Performance 
       Timeline  
Macquarie Technology 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Technology Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Macquarie Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Greentech Metals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Greentech Metals 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 technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Macquarie Technology and Greentech Metals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Macquarie Technology and Greentech Metals

The main advantage of trading using opposite Macquarie Technology and Greentech Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Greentech 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 Greentech Metals will offset losses from the drop in Greentech Metals' long position.
The idea behind Macquarie Technology Group and Greentech 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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