Correlation Between Auswide Bank and WA1 Resources
Can any of the company-specific risk be diversified away by investing in both Auswide Bank and WA1 Resources 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 WA1 Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auswide Bank and WA1 Resources, you can compare the effects of market volatilities on Auswide Bank and WA1 Resources 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 WA1 Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auswide Bank and WA1 Resources.
Diversification Opportunities for Auswide Bank and WA1 Resources
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Auswide and WA1 is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Auswide Bank and WA1 Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WA1 Resources 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 WA1 Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WA1 Resources has no effect on the direction of Auswide Bank i.e., Auswide Bank and WA1 Resources go up and down completely randomly.
Pair Corralation between Auswide Bank and WA1 Resources
Assuming the 90 days trading horizon Auswide Bank is expected to generate 2.55 times less return on investment than WA1 Resources. But when comparing it to its historical volatility, Auswide Bank is 1.65 times less risky than WA1 Resources. It trades about 0.17 of its potential returns per unit of risk. WA1 Resources is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,352 in WA1 Resources on September 1, 2024 and sell it today you would earn a total of 251.00 from holding WA1 Resources or generate 18.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Auswide Bank vs. WA1 Resources
Performance |
| Timeline |
| Auswide Bank |
| WA1 Resources |
Auswide Bank and WA1 Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auswide Bank and WA1 Resources
The main advantage of trading using opposite Auswide Bank and WA1 Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auswide Bank position performs unexpectedly, WA1 Resources 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 WA1 Resources will offset losses from the drop in WA1 Resources' long position.| Auswide Bank vs. National Australia Bank | Auswide Bank vs. National Australia Bank | Auswide Bank vs. Westpac Banking | Auswide Bank vs. National Australia Bank |
| WA1 Resources vs. Northern Star Resources | WA1 Resources vs. Evolution Mining | WA1 Resources vs. Bluescope Steel | WA1 Resources 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |