Correlation Between Macquarie and Boom Logistics

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

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

Diversification Opportunities for Macquarie and Boom Logistics

-0.39

Correlation Coefficient

Macquarie  Boom Logistics

Very good diversification

The 3 months correlation between Macquarie and Boom is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Boom Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boom Logistics and Macquarie 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 Group are associated (or correlated) with Boom Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boom Logistics has no effect on the direction of Macquarie i.e., Macquarie and Boom Logistics go up and down completely randomly.

Pair Corralation between Macquarie and Boom Logistics

Assuming the 90 days trading horizon Macquarie Group is expected to under-perform the Boom Logistics. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Group is 1.6 times less risky than Boom Logistics. The stock trades about -0.11 of its potential returns per unit of risk. The Boom Logistics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  139.00  in Boom Logistics on December 22, 2024 and sell it today you would earn a total of  11.00  from holding Boom Logistics or generate 7.91% return on investment over 90 days.

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

Macquarie Group  vs.  Boom Logistics

Macquarie Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Macquarie Group 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.

Boom Logistics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boom Logistics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Boom Logistics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Macquarie and Boom Logistics

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

The idea behind Macquarie Group and Boom Logistics 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.