Correlation Between Macquarie Technology and Bell Financial

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

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

Diversification Opportunities for Macquarie Technology and Bell Financial

-0.1

Correlation Coefficient

Macquarie Technology  Bell Financial

Good diversification

The 3 months correlation between Macquarie and Bell is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Bell Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Financial Group and Macquarie Technology 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 Macquarie Technology Group are associated (or correlated) with Bell Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Financial Group has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Bell Financial go up and down completely randomly.

Pair Corralation between Macquarie Technology and Bell Financial

Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the Bell Financial. In addition to that, Macquarie Technology is 1.22 times more volatile than Bell Financial Group. It trades about -0.01 of its total potential returns per unit of risk. Bell Financial Group is currently generating about 0.25 per unit of volatility. If you would invest  126.00  in Bell Financial Group on September 25, 2024 and sell it today you would earn a total of  8.00  from holding Bell Financial Group or generate 6.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Macquarie Technology Group  vs.  Bell Financial Group

Macquarie Technology

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Technology Group are ranked lower than 5 (%) 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.

Bell Financial Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bell Financial Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Bell Financial 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 Macquarie Technology and Bell Financial

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

The idea behind Macquarie Technology Group and Bell Financial 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.