Correlation Between Macquarie and Yowie

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

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

Diversification Opportunities for Macquarie and Yowie

0.19

Correlation Coefficient

Macquarie  Yowie

Average diversification

The 3 months correlation between Macquarie and Yowie is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Yowie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yowie Group 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 Yowie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yowie Group has no effect on the direction of Macquarie i.e., Macquarie and Yowie go up and down completely randomly.

Pair Corralation between Macquarie and Yowie

Assuming the 90 days trading horizon Macquarie is expected to generate 15.35 times less return on investment than Yowie. But when comparing it to its historical volatility, Macquarie Group is 1.19 times less risky than Yowie. It trades about 0.01 of its potential returns per unit of risk. Yowie Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2.30  in Yowie Group on September 14, 2024 and sell it today you would earn a total of  0.20  from holding Yowie Group or generate 8.7% return on investment over 90 days.

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

Macquarie Group  vs.  Yowie Group

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Yowie Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yowie Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Yowie may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Macquarie and Yowie

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

The idea behind Macquarie Group and Yowie Group 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 CEOs Directory module to screen CEOs from public companies around the world.