Correlation Between Macquarie Technology and Odyssey Energy
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Odyssey Energy 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 Odyssey Energy 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 Odyssey Energy, you can compare the effects of market volatilities on Macquarie Technology and Odyssey Energy 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 Odyssey Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Odyssey Energy.
Diversification Opportunities for Macquarie Technology and Odyssey Energy
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Macquarie and Odyssey is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Odyssey Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Energy 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 Odyssey Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssey Energy has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Odyssey Energy go up and down completely randomly.
Pair Corralation between Macquarie Technology and Odyssey Energy
Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 0.35 times more return on investment than Odyssey Energy. However, Macquarie Technology Group is 2.85 times less risky than Odyssey Energy. It trades about -0.1 of its potential returns per unit of risk. Odyssey Energy is currently generating about -0.17 per unit of risk. If you would invest 8,643 in Macquarie Technology Group on September 24, 2024 and sell it today you would lose (271.00) from holding Macquarie Technology Group or give up 3.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Macquarie Technology Group vs. Odyssey Energy
Performance |
Timeline |
Macquarie Technology |
Odyssey Energy |
Macquarie Technology and Odyssey Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Macquarie Technology and Odyssey Energy
The main advantage of trading using opposite Macquarie Technology and Odyssey Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Odyssey Energy 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 Odyssey Energy will offset losses from the drop in Odyssey Energy's long position.Macquarie Technology vs. Hutchison Telecommunications | Macquarie Technology vs. Australian Unity Office | Macquarie Technology vs. Prime Financial Group | Macquarie Technology vs. Kkr Credit Income |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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