Correlation Between Macquarie Group and BSP Financial
Can any of the company-specific risk be diversified away by investing in both Macquarie Group and BSP Financial 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 Group and BSP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group Ltd and BSP Financial Group, you can compare the effects of market volatilities on Macquarie Group and BSP Financial 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 Group with a short position of BSP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and BSP Financial.
Diversification Opportunities for Macquarie Group and BSP Financial
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macquarie and BSP is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd and BSP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSP Financial Group and Macquarie Group 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 Ltd are associated (or correlated) with BSP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSP Financial Group has no effect on the direction of Macquarie Group i.e., Macquarie Group and BSP Financial go up and down completely randomly.
Pair Corralation between Macquarie Group and BSP Financial
Assuming the 90 days trading horizon Macquarie Group Ltd is expected to under-perform the BSP Financial. But the preferred stock apears to be less risky and, when comparing its historical volatility, Macquarie Group Ltd is 6.86 times less risky than BSP Financial. The preferred stock trades about -0.06 of its potential returns per unit of risk. The BSP Financial Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 673.00 in BSP Financial Group on October 6, 2024 and sell it today you would earn a total of 17.00 from holding BSP Financial Group or generate 2.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.0% |
Values | Daily Returns |
Macquarie Group Ltd vs. BSP Financial Group
Performance |
Timeline |
Macquarie Group |
BSP Financial Group |
Macquarie Group and BSP Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Macquarie Group and BSP Financial
The main advantage of trading using opposite Macquarie Group and BSP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group position performs unexpectedly, BSP Financial 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 BSP Financial will offset losses from the drop in BSP Financial's long position.Macquarie Group vs. DY6 Metals | Macquarie Group vs. Fisher Paykel Healthcare | Macquarie Group vs. Janison Education Group | Macquarie Group vs. Ramsay Health Care |
BSP Financial vs. MetalsGrove Mining | BSP Financial vs. Aurelia Metals | BSP Financial vs. Aussie Broadband | BSP Financial vs. Group 6 Metals |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |