Correlation Between Conico and Macquarie Technology

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

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

Diversification Opportunities for Conico and Macquarie Technology

-0.29

Correlation Coefficient

Conico  Macquarie Technology

Very good diversification

The 3 months correlation between Conico and Macquarie is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Conico and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology and Conico 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 Conico 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 Conico i.e., Conico and Macquarie Technology go up and down completely randomly.

Pair Corralation between Conico and Macquarie Technology

Assuming the 90 days trading horizon Conico is expected to generate 4.13 times more return on investment than Macquarie Technology. However, Conico is 4.13 times more volatile than Macquarie Technology Group. It trades about 0.03 of its potential returns per unit of risk. Macquarie Technology Group is currently generating about 0.0 per unit of risk. If you would invest  1.00  in Conico on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Conico or generate 0.0% return on investment over 90 days.

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

Conico  vs.  Macquarie Technology Group

Conico

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conico 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 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 Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Technology Group are ranked lower than 3 (%) 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 Conico and Macquarie Technology

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

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.