Correlation Between Auswide Bank and Spirit Telecom
Can any of the company-specific risk be diversified away by investing in both Auswide Bank and Spirit Telecom 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 Spirit Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auswide Bank and Spirit Telecom, you can compare the effects of market volatilities on Auswide Bank and Spirit Telecom 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 Spirit Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auswide Bank and Spirit Telecom.
Diversification Opportunities for Auswide Bank and Spirit Telecom
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Auswide and Spirit is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Auswide Bank and Spirit Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Telecom 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 Spirit Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Telecom has no effect on the direction of Auswide Bank i.e., Auswide Bank and Spirit Telecom go up and down completely randomly.
Pair Corralation between Auswide Bank and Spirit Telecom
Assuming the 90 days trading horizon Auswide Bank is expected to generate 0.82 times more return on investment than Spirit Telecom. However, Auswide Bank is 1.22 times less risky than Spirit Telecom. It trades about 0.16 of its potential returns per unit of risk. Spirit Telecom is currently generating about -0.09 per unit of risk. If you would invest 422.00 in Auswide Bank on August 30, 2024 and sell it today you would earn a total of 28.00 from holding Auswide Bank or generate 6.64% 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. Spirit Telecom
Performance |
| Timeline |
| Auswide Bank |
| Spirit Telecom |
Auswide Bank and Spirit Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auswide Bank and Spirit Telecom
The main advantage of trading using opposite Auswide Bank and Spirit Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auswide Bank position performs unexpectedly, Spirit Telecom 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 Spirit Telecom will offset losses from the drop in Spirit Telecom's long position.| Auswide Bank vs. Aneka Tambang Tbk | Auswide Bank vs. BHP Group Limited | Auswide Bank vs. Commonwealth Bank | Auswide Bank vs. Commonwealth Bank of |
| Spirit Telecom vs. Tlou Energy | Spirit Telecom vs. Encounter Resources | Spirit Telecom vs. Southern Cross Gold | Spirit Telecom vs. Minbos Resources |
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 CEOs Directory module to screen CEOs from public companies around the world.
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