Correlation Between Asia Broadband and Iluka Resources
Can any of the company-specific risk be diversified away by investing in both Asia Broadband and Iluka Resources 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 Asia Broadband and Iluka Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Broadband and Iluka Resources Ltd, you can compare the effects of market volatilities on Asia Broadband and Iluka Resources 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 Asia Broadband with a short position of Iluka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Broadband and Iluka Resources.
Diversification Opportunities for Asia Broadband and Iluka Resources
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and Iluka is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Asia Broadband and Iluka Resources Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iluka Resources and Asia Broadband 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 Asia Broadband are associated (or correlated) with Iluka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iluka Resources has no effect on the direction of Asia Broadband i.e., Asia Broadband and Iluka Resources go up and down completely randomly.
Pair Corralation between Asia Broadband and Iluka Resources
Given the investment horizon of 90 days Asia Broadband is expected to generate 2.06 times more return on investment than Iluka Resources. However, Asia Broadband is 2.06 times more volatile than Iluka Resources Ltd. It trades about -0.06 of its potential returns per unit of risk. Iluka Resources Ltd is currently generating about -0.34 per unit of risk. If you would invest 2.54 in Asia Broadband on September 1, 2024 and sell it today you would lose (0.27) from holding Asia Broadband or give up 10.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Asia Broadband vs. Iluka Resources Ltd
Performance |
| Timeline |
| Asia Broadband |
| Iluka Resources |
Asia Broadband and Iluka Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Broadband and Iluka Resources
The main advantage of trading using opposite Asia Broadband and Iluka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Broadband position performs unexpectedly, Iluka Resources 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 Iluka Resources will offset losses from the drop in Iluka Resources' long position.| Asia Broadband vs. Fury Gold Mines | Asia Broadband vs. Lion Copper and | Asia Broadband vs. Trilogy Metals | Asia Broadband vs. Western Copper and |
| Iluka Resources vs. ERAMET SA | Iluka Resources vs. Giyani Metals Corp | Iluka Resources vs. IGO Limited | Iluka Resources vs. Grid Metals Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |