Correlation Between Aussie Broadband and AMP
Can any of the company-specific risk be diversified away by investing in both Aussie Broadband and AMP 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 Aussie Broadband and AMP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aussie Broadband and AMP, you can compare the effects of market volatilities on Aussie Broadband and AMP 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 Aussie Broadband with a short position of AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aussie Broadband and AMP.
Diversification Opportunities for Aussie Broadband and AMP
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aussie and AMP is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aussie Broadband and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP and Aussie Broadband 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 Aussie Broadband are associated (or correlated) with AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of Aussie Broadband i.e., Aussie Broadband and AMP go up and down completely randomly.
Pair Corralation between Aussie Broadband and AMP
Assuming the 90 days trading horizon Aussie Broadband is expected to generate 10.96 times less return on investment than AMP. In addition to that, Aussie Broadband is 1.23 times more volatile than AMP. It trades about 0.01 of its total potential returns per unit of risk. AMP is currently generating about 0.12 per unit of volatility. If you would invest 83.00 in AMP on September 14, 2024 and sell it today you would earn a total of 74.00 from holding AMP or generate 89.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aussie Broadband vs. AMP
Performance |
| Timeline |
| Aussie Broadband |
| AMP |
Aussie Broadband and AMP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aussie Broadband and AMP
The main advantage of trading using opposite Aussie Broadband and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aussie Broadband position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP's long position.| Aussie Broadband vs. Accent Resources NL | Aussie Broadband vs. Hutchison Telecommunications | Aussie Broadband vs. Energy Resources | Aussie Broadband vs. Pact Group Holdings |
| AMP vs. IDP Education | AMP vs. Sonic Healthcare | AMP vs. Aussie Broadband | AMP vs. Healthco Healthcare and |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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