Correlation Between Auswide Bank and Clime Investment
Can any of the company-specific risk be diversified away by investing in both Auswide Bank and Clime Investment 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 Auswide Bank and Clime Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auswide Bank and Clime Investment Management, you can compare the effects of market volatilities on Auswide Bank and Clime Investment 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 Auswide Bank with a short position of Clime Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auswide Bank and Clime Investment.
Diversification Opportunities for Auswide Bank and Clime Investment
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auswide and Clime is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Auswide Bank and Clime Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clime Investment Man and Auswide Bank 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 Auswide Bank are associated (or correlated) with Clime Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clime Investment Man has no effect on the direction of Auswide Bank i.e., Auswide Bank and Clime Investment go up and down completely randomly.
Pair Corralation between Auswide Bank and Clime Investment
Assuming the 90 days trading horizon Auswide Bank is expected to generate 1.93 times more return on investment than Clime Investment. However, Auswide Bank is 1.93 times more volatile than Clime Investment Management. It trades about 0.11 of its potential returns per unit of risk. Clime Investment Management is currently generating about 0.04 per unit of risk. If you would invest 422.00 in Auswide Bank on October 24, 2024 and sell it today you would earn a total of 64.00 from holding Auswide Bank or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auswide Bank vs. Clime Investment Management
Performance |
| Timeline |
| Auswide Bank |
| Clime Investment Man |
Auswide Bank and Clime Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auswide Bank and Clime Investment
The main advantage of trading using opposite Auswide Bank and Clime Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auswide Bank position performs unexpectedly, Clime Investment 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 Clime Investment will offset losses from the drop in Clime Investment's long position.| Auswide Bank vs. Centrex Metals | Auswide Bank vs. DY6 Metals | Auswide Bank vs. Super Retail Group | Auswide Bank vs. Aurelia Metals |
| Clime Investment vs. Australian Unity Office | Clime Investment vs. Auswide Bank | Clime Investment vs. Hotel Property Investments | Clime Investment vs. Insignia Financial |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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