Correlation Between Macquarie Technology and Mindax

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

Diversification Opportunities for Macquarie Technology and Mindax

0.28

Correlation Coefficient

Macquarie Technology  Mindax

Modest diversification

The 3 months correlation between Macquarie and Mindax is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Mindax Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindax Limited 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 Mindax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindax Limited has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Mindax go up and down completely randomly.

Pair Corralation between Macquarie Technology and Mindax

Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the Mindax. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Technology Group is 2.44 times less risky than Mindax. The stock trades about 0.0 of its potential returns per unit of risk. The Mindax Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3.80  in Mindax Limited on October 4, 2024 and sell it today you would earn a total of  0.20  from holding Mindax Limited or generate 5.26% return on investment over 90 days.

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

Macquarie Technology Group  vs.  Mindax Limited

Macquarie Technology

Risk-Adjusted Performance

4 of 100

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.

Mindax Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mindax Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mindax is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Macquarie Technology and Mindax

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

The idea behind Macquarie Technology Group and Mindax Limited 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.