Correlation Between Macquarie Group and MSCI

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

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

Diversification Opportunities for Macquarie Group and MSCI

0.4

Correlation Coefficient

Macquarie Group  MSCI

Very weak diversification

The 3 months correlation between Macquarie and MSCI is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Limited and MSCI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI Inc and Macquarie Group 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 Limited are associated (or correlated) with MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI Inc has no effect on the direction of Macquarie Group i.e., Macquarie Group and MSCI go up and down completely randomly.

Pair Corralation between Macquarie Group and MSCI

Assuming the 90 days horizon Macquarie Group Limited is expected to generate 1.21 times more return on investment than MSCI. However, Macquarie Group is 1.21 times more volatile than MSCI Inc. It trades about 0.21 of its potential returns per unit of risk. MSCI Inc is currently generating about 0.07 per unit of risk. If you would invest  10,051  in Macquarie Group Limited on April 20, 2025 and sell it today you would earn a total of  2,549  from holding Macquarie Group Limited or generate 25.36% return on investment over 90 days.

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

Macquarie Group Limited  vs.  MSCI Inc

Macquarie Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Group Limited are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Macquarie Group reported solid returns over the last few months and may actually be approaching a breakup point.

MSCI Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MSCI Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MSCI may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Macquarie Group and MSCI

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

The idea behind Macquarie Group Limited and MSCI Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.