Correlation Between Wellnex Life and Macquarie

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Can any of the company-specific risk be diversified away by investing in both Wellnex Life 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 Wellnex Life and Macquarie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wellnex Life and Macquarie Group, you can compare the effects of market volatilities on Wellnex Life 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 Wellnex Life with a short position of Macquarie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wellnex Life and Macquarie.

Diversification Opportunities for Wellnex Life and Macquarie

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Wellnex and Macquarie is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Wellnex Life and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Wellnex Life 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 Wellnex Life 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 Wellnex Life i.e., Wellnex Life and Macquarie go up and down completely randomly.

Pair Corralation between Wellnex Life and Macquarie

Assuming the 90 days trading horizon Wellnex Life is expected to generate 98.97 times more return on investment than Macquarie. However, Wellnex Life is 98.97 times more volatile than Macquarie Group. It trades about 0.11 of its potential returns per unit of risk. Macquarie Group is currently generating about 0.07 per unit of risk. If you would invest  5.70  in Wellnex Life on September 20, 2024 and sell it today you would earn a total of  68.30  from holding Wellnex Life or generate 1198.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Wellnex Life  vs.  Macquarie Group

 Performance 
       Timeline  
Wellnex Life 

Risk-Adjusted Performance

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Strong
Very Weak
Over the last 90 days Wellnex Life has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Macquarie Group 

Risk-Adjusted Performance

0 of 100

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

Wellnex Life and Macquarie Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Wellnex Life and Macquarie

The main advantage of trading using opposite Wellnex Life and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wellnex Life 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 Wellnex Life 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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