Correlation Between Itech Minerals and Macquarie Technology

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

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

Diversification Opportunities for Itech Minerals and Macquarie Technology

-0.39

Correlation Coefficient

Itech Minerals  Macquarie Technology

Very good diversification

The 3 months correlation between Itech and Macquarie is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Itech Minerals and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology and Itech Minerals 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 Itech Minerals 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 Itech Minerals i.e., Itech Minerals and Macquarie Technology go up and down completely randomly.

Pair Corralation between Itech Minerals and Macquarie Technology

Assuming the 90 days trading horizon Itech Minerals is expected to under-perform the Macquarie Technology. In addition to that, Itech Minerals is 2.46 times more volatile than Macquarie Technology Group. It trades about -0.1 of its total potential returns per unit of risk. Macquarie Technology Group is currently generating about 0.09 per unit of volatility. If you would invest  7,988  in Macquarie Technology Group on September 15, 2024 and sell it today you would earn a total of  676.00  from holding Macquarie Technology Group or generate 8.46% return on investment over 90 days.

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

Itech Minerals  vs.  Macquarie Technology Group

Itech Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Itech Minerals 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 primary 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

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Technology Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Macquarie Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Itech Minerals and Macquarie Technology

The main advantage of trading using opposite Itech Minerals and Macquarie Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itech Minerals 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 Itech Minerals 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.