Correlation Between Talisman Mining and Macquarie
Can any of the company-specific risk be diversified away by investing in both Talisman Mining 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 Talisman Mining and Macquarie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talisman Mining and Macquarie Group, you can compare the effects of market volatilities on Talisman Mining 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 Talisman Mining with a short position of Macquarie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talisman Mining and Macquarie.
Diversification Opportunities for Talisman Mining and Macquarie
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Talisman and Macquarie is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Talisman Mining and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Talisman Mining 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 Talisman Mining 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 Talisman Mining i.e., Talisman Mining and Macquarie go up and down completely randomly.
Pair Corralation between Talisman Mining and Macquarie
Assuming the 90 days trading horizon Talisman Mining is expected to under-perform the Macquarie. In addition to that, Talisman Mining is 2.97 times more volatile than Macquarie Group. It trades about -0.05 of its total potential returns per unit of risk. Macquarie Group is currently generating about 0.01 per unit of volatility. If you would invest 23,111 in Macquarie Group on November 29, 2024 and sell it today you would lose (5.00) from holding Macquarie Group or give up 0.02% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Talisman Mining vs. Macquarie Group
Performance |
Timeline |
Talisman Mining |
Macquarie Group |
Talisman Mining and Macquarie Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Talisman Mining and Macquarie
The main advantage of trading using opposite Talisman Mining and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talisman Mining 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.Talisman Mining vs. MetalsGrove Mining | Talisman Mining vs. IRIS Metals | Talisman Mining vs. Janison Education Group | Talisman Mining vs. Polymetals Resources |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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