Correlation Between Auswide Bank and TPG Telecom
Can any of the company-specific risk be diversified away by investing in both Auswide Bank and TPG 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 TPG 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 TPG Telecom, you can compare the effects of market volatilities on Auswide Bank and TPG 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 TPG Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auswide Bank and TPG Telecom.
Diversification Opportunities for Auswide Bank and TPG Telecom
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Auswide and TPG is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Auswide Bank and TPG Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG 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 TPG Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Telecom has no effect on the direction of Auswide Bank i.e., Auswide Bank and TPG Telecom go up and down completely randomly.
Pair Corralation between Auswide Bank and TPG Telecom
Assuming the 90 days trading horizon Auswide Bank is expected to generate 1.69 times more return on investment than TPG Telecom. However, Auswide Bank is 1.69 times more volatile than TPG Telecom. It trades about 0.16 of its potential returns per unit of risk. TPG Telecom is currently generating about -0.03 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auswide Bank vs. TPG Telecom
Performance |
| Timeline |
| Auswide Bank |
| TPG Telecom |
Auswide Bank and TPG Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auswide Bank and TPG Telecom
The main advantage of trading using opposite Auswide Bank and TPG Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auswide Bank position performs unexpectedly, TPG 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 TPG Telecom will offset losses from the drop in TPG 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 |
| TPG Telecom vs. Tlou Energy | TPG Telecom vs. Encounter Resources | TPG Telecom vs. Southern Cross Gold | TPG 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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