Correlation Between Macquarie and Staude Capital

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

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

Diversification Opportunities for Macquarie and Staude Capital

-0.14

Correlation Coefficient

Macquarie  Staude Capital

Good diversification

The 3 months correlation between Macquarie and Staude is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Staude Capital Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staude Capital Global and Macquarie 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 Group are associated (or correlated) with Staude Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staude Capital Global has no effect on the direction of Macquarie i.e., Macquarie and Staude Capital go up and down completely randomly.

Pair Corralation between Macquarie and Staude Capital

Assuming the 90 days trading horizon Macquarie Group is expected to under-perform the Staude Capital. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Group is 1.23 times less risky than Staude Capital. The stock trades about -0.02 of its potential returns per unit of risk. The Staude Capital Global is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  121.00  in Staude Capital Global on September 29, 2024 and sell it today you would earn a total of  14.00  from holding Staude Capital Global or generate 11.57% return on investment over 90 days.

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

Macquarie Group  vs.  Staude Capital Global

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

Staude Capital Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Staude Capital Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Staude Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Macquarie and Staude Capital

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

The idea behind Macquarie Group and Staude Capital Global 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.