Correlation Between Auswide Bank and Gold Road
Can any of the company-specific risk be diversified away by investing in both Auswide Bank and Gold Road 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 Gold Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auswide Bank and Gold Road Resources, you can compare the effects of market volatilities on Auswide Bank and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auswide Bank and Gold Road.
Diversification Opportunities for Auswide Bank and Gold Road
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Auswide and Gold is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Auswide Bank and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of Auswide Bank i.e., Auswide Bank and Gold Road go up and down completely randomly.
Pair Corralation between Auswide Bank and Gold Road
Assuming the 90 days trading horizon Auswide Bank is expected to generate 6.04 times less return on investment than Gold Road. But when comparing it to its historical volatility, Auswide Bank is 1.4 times less risky than Gold Road. It trades about 0.02 of its potential returns per unit of risk. Gold Road Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 148.00 in Gold Road Resources on August 27, 2024 and sell it today you would earn a total of 43.00 from holding Gold Road Resources or generate 29.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auswide Bank vs. Gold Road Resources
Performance |
| Timeline |
| Auswide Bank |
| Gold Road Resources |
Auswide Bank and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auswide Bank and Gold Road
The main advantage of trading using opposite Auswide Bank and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auswide Bank position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road's long position.| Auswide Bank vs. Aneka Tambang Tbk | Auswide Bank vs. BHP Group Limited | Auswide Bank vs. Commonwealth Bank of | Auswide Bank vs. Commonwealth Bank of |
| Gold Road vs. Northern Star Resources | Gold Road vs. Evolution Mining | Gold Road vs. Bluescope Steel | Gold Road vs. Sandfire Resources NL |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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