Correlation Between Judo Capital and Macquarie

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

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

Diversification Opportunities for Judo Capital and Macquarie

0.33

Correlation Coefficient

Judo Capital  Macquarie

Weak diversification

The 3 months correlation between Judo and Macquarie is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Judo Capital Holdings and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Judo Capital 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 Judo Capital Holdings 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 Judo Capital i.e., Judo Capital and Macquarie go up and down completely randomly.

Pair Corralation between Judo Capital and Macquarie

Assuming the 90 days trading horizon Judo Capital Holdings is expected to under-perform the Macquarie. In addition to that, Judo Capital is 1.35 times more volatile than Macquarie Group. It trades about -0.37 of its total potential returns per unit of risk. Macquarie Group is currently generating about -0.23 per unit of volatility. If you would invest  22,937  in Macquarie Group on September 22, 2024 and sell it today you would lose (1,047) from holding Macquarie Group or give up 4.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Judo Capital Holdings  vs.  Macquarie Group

Judo Capital Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Judo Capital Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Judo Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Macquarie Group

Risk-Adjusted Performance

0 of 100

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

Pair Trading with Judo Capital and Macquarie

The main advantage of trading using opposite Judo Capital and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Judo Capital 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 Judo Capital Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.