Correlation Between Auswide Bank and Metro Mining
Can any of the company-specific risk be diversified away by investing in both Auswide Bank and Metro Mining 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 Metro Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auswide Bank and Metro Mining, you can compare the effects of market volatilities on Auswide Bank and Metro Mining 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 Metro Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auswide Bank and Metro Mining.
Diversification Opportunities for Auswide Bank and Metro Mining
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Auswide and Metro is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Auswide Bank and Metro Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Mining 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 Metro Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Mining has no effect on the direction of Auswide Bank i.e., Auswide Bank and Metro Mining go up and down completely randomly.
Pair Corralation between Auswide Bank and Metro Mining
Assuming the 90 days trading horizon Auswide Bank is expected to generate 0.67 times more return on investment than Metro Mining. However, Auswide Bank is 1.5 times less risky than Metro Mining. It trades about 0.18 of its potential returns per unit of risk. Metro Mining is currently generating about 0.07 per unit of risk. If you would invest 417.00 in Auswide Bank on August 28, 2024 and sell it today you would earn a total of 31.00 from holding Auswide Bank or generate 7.43% 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. Metro Mining
Performance |
| Timeline |
| Auswide Bank |
| Metro Mining |
Auswide Bank and Metro Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auswide Bank and Metro Mining
The main advantage of trading using opposite Auswide Bank and Metro Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auswide Bank position performs unexpectedly, Metro Mining 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 Metro Mining will offset losses from the drop in Metro Mining'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 |
| Metro Mining vs. Northern Star Resources | Metro Mining vs. Evolution Mining | Metro Mining vs. Bluescope Steel | Metro Mining 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |