Correlation Between Auswide Bank and Mayfield Childcare
Can any of the company-specific risk be diversified away by investing in both Auswide Bank and Mayfield Childcare 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 Mayfield Childcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auswide Bank and Mayfield Childcare, you can compare the effects of market volatilities on Auswide Bank and Mayfield Childcare 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 Mayfield Childcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auswide Bank and Mayfield Childcare.
Diversification Opportunities for Auswide Bank and Mayfield Childcare
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Auswide and Mayfield is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Auswide Bank and Mayfield Childcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfield Childcare 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 Mayfield Childcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfield Childcare has no effect on the direction of Auswide Bank i.e., Auswide Bank and Mayfield Childcare go up and down completely randomly.
Pair Corralation between Auswide Bank and Mayfield Childcare
Assuming the 90 days trading horizon Auswide Bank is expected to generate 0.55 times more return on investment than Mayfield Childcare. However, Auswide Bank is 1.83 times less risky than Mayfield Childcare. It trades about 0.0 of its potential returns per unit of risk. Mayfield Childcare is currently generating about -0.06 per unit of risk. If you would invest 518.00 in Auswide Bank on November 1, 2024 and sell it today you would lose (29.00) from holding Auswide Bank or give up 5.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auswide Bank vs. Mayfield Childcare
Performance |
| Timeline |
| Auswide Bank |
| Mayfield Childcare |
Auswide Bank and Mayfield Childcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auswide Bank and Mayfield Childcare
The main advantage of trading using opposite Auswide Bank and Mayfield Childcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auswide Bank position performs unexpectedly, Mayfield Childcare 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 Mayfield Childcare will offset losses from the drop in Mayfield Childcare's long position.| Auswide Bank vs. Air New Zealand | Auswide Bank vs. Meeka Metals Limited | Auswide Bank vs. Hutchison Telecommunications | Auswide Bank vs. Australian Agricultural |
| Mayfield Childcare vs. Liberty Financial Group | Mayfield Childcare vs. Sky Metals | Mayfield Childcare vs. Finexia Financial Group | Mayfield Childcare vs. Auswide Bank |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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