Correlation Between RLF AgTech and Macquarie

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

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

Diversification Opportunities for RLF AgTech and Macquarie

0.07

Correlation Coefficient

RLF AgTech  Macquarie

Significant diversification

The 3 months correlation between RLF and Macquarie is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding RLF AgTech and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and RLF AgTech 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 RLF AgTech are associated (or correlated) with Macquarie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of RLF AgTech i.e., RLF AgTech and Macquarie go up and down completely randomly.

Pair Corralation between RLF AgTech and Macquarie

Assuming the 90 days trading horizon RLF AgTech is expected to under-perform the Macquarie. In addition to that, RLF AgTech is 3.41 times more volatile than Macquarie Group. It trades about -0.17 of its total potential returns per unit of risk. Macquarie Group is currently generating about -0.05 per unit of volatility. If you would invest  23,057  in Macquarie Group on September 25, 2024 and sell it today you would lose (690.00) from holding Macquarie Group or give up 2.99% of portfolio value over 90 days.

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

RLF AgTech  vs.  Macquarie Group

RLF AgTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RLF AgTech 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 technical and fundamental 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.

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.

Pair Trading with RLF AgTech and Macquarie

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

The idea behind RLF AgTech and Macquarie 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .