Correlation Between ABACUS STORAGE and Macquarie Technology

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

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

Diversification Opportunities for ABACUS STORAGE and Macquarie Technology

-0.62

Correlation Coefficient

ABACUS STORAGE  Macquarie Technology

Excellent diversification

The 3 months correlation between ABACUS and Macquarie is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology and ABACUS STORAGE 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 ABACUS STORAGE KING are associated (or correlated) with Macquarie Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Technology has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Macquarie Technology go up and down completely randomly.

Pair Corralation between ABACUS STORAGE and Macquarie Technology

Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to under-perform the Macquarie Technology. But the stock apears to be less risky and, when comparing its historical volatility, ABACUS STORAGE KING is 1.28 times less risky than Macquarie Technology. The stock trades about -0.14 of its potential returns per unit of risk. The Macquarie Technology Group is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  8,643  in Macquarie Technology Group on September 24, 2024 and sell it today you would lose (271.00) from holding Macquarie Technology Group or give up 3.14% of portfolio value over 90 days.

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

ABACUS STORAGE KING  vs.  Macquarie Technology Group

ABACUS STORAGE KING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABACUS STORAGE KING 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 forward-looking signals 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 Technology

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Technology Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Macquarie Technology 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 ABACUS STORAGE and Macquarie Technology

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

The idea behind ABACUS STORAGE KING and Macquarie Technology 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.