Correlation Between Auswide Bank and Finexia Financial
Can any of the company-specific risk be diversified away by investing in both Auswide Bank and Finexia Financial 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 Finexia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auswide Bank and Finexia Financial Group, you can compare the effects of market volatilities on Auswide Bank and Finexia Financial 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 Finexia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auswide Bank and Finexia Financial.
Diversification Opportunities for Auswide Bank and Finexia Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Auswide and Finexia is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Auswide Bank and Finexia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finexia Financial 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 Finexia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finexia Financial has no effect on the direction of Auswide Bank i.e., Auswide Bank and Finexia Financial go up and down completely randomly.
Pair Corralation between Auswide Bank and Finexia Financial
Assuming the 90 days trading horizon Auswide Bank is expected to generate 0.84 times more return on investment than Finexia Financial. However, Auswide Bank is 1.19 times less risky than Finexia Financial. It trades about 0.12 of its potential returns per unit of risk. Finexia Financial Group is currently generating about -0.01 per unit of risk. If you would invest 422.00 in Auswide Bank on November 6, 2024 and sell it today you would earn a total of 68.00 from holding Auswide Bank or generate 16.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auswide Bank vs. Finexia Financial Group
Performance |
| Timeline |
| Auswide Bank |
| Finexia Financial |
Auswide Bank and Finexia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auswide Bank and Finexia Financial
The main advantage of trading using opposite Auswide Bank and Finexia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auswide Bank position performs unexpectedly, Finexia Financial 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 Finexia Financial will offset losses from the drop in Finexia Financial's long position.| Auswide Bank vs. Diversified United Investment | Auswide Bank vs. Computershare | Auswide Bank vs. Super Retail Group | Auswide Bank vs. Pure Foods Tasmania |
| Finexia Financial vs. Queste Communications | Finexia Financial vs. Readytech Holdings | Finexia Financial vs. High Tech Metals | Finexia Financial vs. Energy Technologies Limited |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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