Correlation Between Auswide Bank and Sandon Capital
Can any of the company-specific risk be diversified away by investing in both Auswide Bank and Sandon Capital 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 Sandon Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auswide Bank and Sandon Capital Investments, you can compare the effects of market volatilities on Auswide Bank and Sandon Capital 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 Sandon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auswide Bank and Sandon Capital.
Diversification Opportunities for Auswide Bank and Sandon Capital
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Auswide and Sandon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Auswide Bank and Sandon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandon Capital Inves 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 Sandon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandon Capital Inves has no effect on the direction of Auswide Bank i.e., Auswide Bank and Sandon Capital go up and down completely randomly.
Pair Corralation between Auswide Bank and Sandon Capital
Assuming the 90 days trading horizon Auswide Bank is expected to generate 3.0 times less return on investment than Sandon Capital. In addition to that, Auswide Bank is 1.77 times more volatile than Sandon Capital Investments. It trades about 0.04 of its total potential returns per unit of risk. Sandon Capital Investments is currently generating about 0.2 per unit of volatility. If you would invest 78.00 in Sandon Capital Investments on October 30, 2024 and sell it today you would earn a total of 3.00 from holding Sandon Capital Investments or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Auswide Bank vs. Sandon Capital Investments
Performance |
| Timeline |
| Auswide Bank |
| Sandon Capital Inves |
Auswide Bank and Sandon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auswide Bank and Sandon Capital
The main advantage of trading using opposite Auswide Bank and Sandon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auswide Bank position performs unexpectedly, Sandon Capital 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 Sandon Capital will offset losses from the drop in Sandon Capital's long position.| Auswide Bank vs. Sonic Healthcare | Auswide Bank vs. Oneview Healthcare PLC | Auswide Bank vs. Event Hospitality and | Auswide Bank vs. Regal Funds Management |
| Sandon Capital vs. Wt Financial Group | Sandon Capital vs. Medibank Private | Sandon Capital vs. Macquarie Bank Limited | Sandon Capital vs. Ras Technology Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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