Correlation Between Macquarie and Redflow

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

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

Diversification Opportunities for Macquarie and Redflow

0.0

Correlation Coefficient

Macquarie  Redflow

Pay attention - limited upside

The 3 months correlation between Macquarie and Redflow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group and Redflow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redflow 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 Redflow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redflow has no effect on the direction of Macquarie i.e., Macquarie and Redflow go up and down completely randomly.

Pair Corralation between Macquarie and Redflow

If you would invest  18,916  in Macquarie Group on April 24, 2025 and sell it today you would earn a total of  3,550  from holding Macquarie Group or generate 18.77% return on investment over 90 days.

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

Macquarie Group  vs.  Redflow

Macquarie Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Macquarie unveiled solid returns over the last few months and may actually be approaching a breakup point.

Redflow

Risk-Adjusted Performance

Very Weak

Over the last 90 days Redflow has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Redflow 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 and Redflow

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

The idea behind Macquarie Group and Redflow 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.