Correlation Between Macquarie and Platinum Asset

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

By analyzing existing cross correlation between Macquarie Group and Platinum Asset Management, you can compare the effects of market volatilities on Macquarie and Platinum Asset 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 Platinum Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie and Platinum Asset.

Diversification Opportunities for Macquarie and Platinum Asset

0.11

Correlation Coefficient

Macquarie  Platinum Asset

Average diversification

The 3 months correlation between Macquarie and Platinum is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Platinum Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asset Management 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 Platinum Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asset Management has no effect on the direction of Macquarie i.e., Macquarie and Platinum Asset go up and down completely randomly.

Pair Corralation between Macquarie and Platinum Asset

Assuming the 90 days trading horizon Macquarie Group is expected to generate 0.39 times more return on investment than Platinum Asset. However, Macquarie Group is 2.54 times less risky than Platinum Asset. It trades about -0.04 of its potential returns per unit of risk. Platinum Asset Management is currently generating about -0.12 per unit of risk. If you would invest  23,083  in Macquarie Group on September 27, 2024 and sell it today you would lose (770.00) from holding Macquarie Group or give up 3.34% of portfolio value over 90 days.

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

Macquarie Group  vs.  Platinum Asset Management

Macquarie Group

Risk-Adjusted Performance

0 of 100

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 comparatively stable technical and fundamental indicators, Macquarie is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Platinum Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Platinum Asset Management 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 primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Macquarie and Platinum Asset

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

The idea behind Macquarie Group and Platinum Asset Management 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.