Correlation Between Truscott Mining and Macquarie Group

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

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

Diversification Opportunities for Truscott Mining and Macquarie Group

0.19

Correlation Coefficient

Truscott Mining  Macquarie Group

Average diversification

The 3 months correlation between Truscott and Macquarie is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Truscott Mining Corp and Macquarie Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group and Truscott Mining 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 Truscott Mining Corp 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 Truscott Mining i.e., Truscott Mining and Macquarie Group go up and down completely randomly.

Pair Corralation between Truscott Mining and Macquarie Group

Assuming the 90 days trading horizon Truscott Mining Corp is expected to generate 2.37 times more return on investment than Macquarie Group. However, Truscott Mining is 2.37 times more volatile than Macquarie Group Ltd. It trades about 0.06 of its potential returns per unit of risk. Macquarie Group Ltd is currently generating about -0.08 per unit of risk. If you would invest  7.70  in Truscott Mining Corp on September 28, 2024 and sell it today you would earn a total of  0.10  from holding Truscott Mining Corp or generate 1.3% return on investment over 90 days.

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

Truscott Mining Corp  vs.  Macquarie Group Ltd

Truscott Mining Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Truscott Mining Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Truscott Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Macquarie Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Group Ltd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Macquarie Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Truscott Mining and Macquarie Group

The main advantage of trading using opposite Truscott Mining and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truscott Mining 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.

The idea behind Truscott Mining Corp and Macquarie Group Ltd 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..