Correlation Between Kip McGrath and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both Kip McGrath 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 Kip McGrath and Macquarie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kip McGrath Education and Macquarie Group Ltd, you can compare the effects of market volatilities on Kip McGrath 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 Kip McGrath with a short position of Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and Macquarie Group.
Diversification Opportunities for Kip McGrath and Macquarie Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kip and Macquarie is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and Macquarie Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Kip McGrath 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 Kip McGrath Education 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 Kip McGrath i.e., Kip McGrath and Macquarie Group go up and down completely randomly.
Pair Corralation between Kip McGrath and Macquarie Group
Assuming the 90 days trading horizon Kip McGrath Education is expected to generate 4.58 times more return on investment than Macquarie Group. However, Kip McGrath is 4.58 times more volatile than Macquarie Group Ltd. It trades about 0.1 of its potential returns per unit of risk. Macquarie Group Ltd is currently generating about 0.05 per unit of risk. If you would invest 43.00 in Kip McGrath Education on September 25, 2024 and sell it today you would earn a total of 5.00 from holding Kip McGrath Education or generate 11.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.46% |
Values | Daily Returns |
Kip McGrath Education vs. Macquarie Group Ltd
Performance |
Timeline |
Kip McGrath Education |
Macquarie Group |
Kip McGrath and Macquarie Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kip McGrath and Macquarie Group
The main advantage of trading using opposite Kip McGrath and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath 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.Kip McGrath vs. Aneka Tambang Tbk | Kip McGrath vs. Commonwealth Bank | Kip McGrath vs. Commonwealth Bank of | Kip McGrath vs. Australia and New |
Macquarie Group vs. Actinogen Medical | Macquarie Group vs. Kip McGrath Education | Macquarie Group vs. Beston Global Food | Macquarie Group vs. Infomedia |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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