Correlation Between Cleanaway Waste and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both Cleanaway Waste and Macquarie Group 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 Cleanaway Waste and Macquarie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleanaway Waste Management and Macquarie Group Limited, you can compare the effects of market volatilities on Cleanaway Waste and Macquarie Group 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 Cleanaway Waste with a short position of Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway Waste and Macquarie Group.
Diversification Opportunities for Cleanaway Waste and Macquarie Group
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cleanaway and Macquarie is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Macquarie Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Cleanaway Waste 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 Cleanaway Waste Management are associated (or correlated) with Macquarie Group. 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 Cleanaway Waste i.e., Cleanaway Waste and Macquarie Group go up and down completely randomly.
Pair Corralation between Cleanaway Waste and Macquarie Group
Assuming the 90 days trading horizon Cleanaway Waste is expected to generate 2.04 times less return on investment than Macquarie Group. In addition to that, Cleanaway Waste is 1.29 times more volatile than Macquarie Group Limited. It trades about 0.03 of its total potential returns per unit of risk. Macquarie Group Limited is currently generating about 0.08 per unit of volatility. If you would invest 9,778 in Macquarie Group Limited on September 28, 2024 and sell it today you would earn a total of 3,548 from holding Macquarie Group Limited or generate 36.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cleanaway Waste Management vs. Macquarie Group Limited
Performance |
Timeline |
Cleanaway Waste Mana |
Macquarie Group |
Cleanaway Waste and Macquarie Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cleanaway Waste and Macquarie Group
The main advantage of trading using opposite Cleanaway Waste and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway Waste position performs unexpectedly, Macquarie Group 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 Group will offset losses from the drop in Macquarie Group's long position.Cleanaway Waste vs. KRAKATAU STEEL B | Cleanaway Waste vs. ALGOMA STEEL GROUP | Cleanaway Waste vs. Uber Technologies | Cleanaway Waste vs. Perma Fix Environmental Services |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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