Correlation Between Wellnex Life and Macquarie Group

Can any of the company-specific risk be diversified away by investing in both Wellnex Life 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 Wellnex Life and Macquarie Group 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 Ltd, you can compare the effects of market volatilities on Wellnex Life 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 Wellnex Life with a short position of Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wellnex Life and Macquarie Group.

Diversification Opportunities for Wellnex Life and Macquarie Group

-0.54

Correlation Coefficient

Wellnex Life  Macquarie Group

Excellent diversification

The 3 months correlation between Wellnex and Macquarie is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wellnex Life and Macquarie Group Ltd 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 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 Wellnex Life i.e., Wellnex Life and Macquarie Group go up and down completely randomly.

Pair Corralation between Wellnex Life and Macquarie Group

Assuming the 90 days trading horizon Wellnex Life is expected to generate 123.72 times more return on investment than Macquarie Group. However, Wellnex Life is 123.72 times more volatile than Macquarie Group Ltd. It trades about 0.05 of its potential returns per unit of risk. Macquarie Group Ltd is currently generating about 0.07 per unit of risk. If you would invest  5.30  in Wellnex Life on September 19, 2024 and sell it today you would earn a total of  62.70  from holding Wellnex Life or generate 1183.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Wellnex Life  vs.  Macquarie Group Ltd

Wellnex Life

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic 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

Insignificant

Over the last 90 days Macquarie Group Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Macquarie Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wellnex Life and Macquarie Group

The main advantage of trading using opposite Wellnex Life and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wellnex Life 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.

The idea behind Wellnex Life and Macquarie Group Ltd 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.