Correlation Between Aussie Broadband and FleetPartners
Can any of the company-specific risk be diversified away by investing in both Aussie Broadband and FleetPartners 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 FleetPartners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aussie Broadband and FleetPartners Group, you can compare the effects of market volatilities on Aussie Broadband and FleetPartners 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 FleetPartners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aussie Broadband and FleetPartners.
Diversification Opportunities for Aussie Broadband and FleetPartners
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aussie and FleetPartners is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aussie Broadband and FleetPartners Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FleetPartners Group 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 FleetPartners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FleetPartners Group has no effect on the direction of Aussie Broadband i.e., Aussie Broadband and FleetPartners go up and down completely randomly.
Pair Corralation between Aussie Broadband and FleetPartners
Assuming the 90 days trading horizon Aussie Broadband is expected to generate 1.34 times more return on investment than FleetPartners. However, Aussie Broadband is 1.34 times more volatile than FleetPartners Group. It trades about 0.03 of its potential returns per unit of risk. FleetPartners Group is currently generating about 0.03 per unit of risk. If you would invest 309.00 in Aussie Broadband on November 19, 2024 and sell it today you would earn a total of 82.00 from holding Aussie Broadband or generate 26.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aussie Broadband vs. FleetPartners Group
Performance |
| Timeline |
| Aussie Broadband |
| FleetPartners Group |
Aussie Broadband and FleetPartners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aussie Broadband and FleetPartners
The main advantage of trading using opposite Aussie Broadband and FleetPartners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aussie Broadband position performs unexpectedly, FleetPartners 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 FleetPartners will offset losses from the drop in FleetPartners' long position.| Aussie Broadband vs. Sky Metals | Aussie Broadband vs. Catalyst Metals | Aussie Broadband vs. MetalsGrove Mining | Aussie Broadband vs. Queste Communications |
| FleetPartners vs. Spirit Telecom | FleetPartners vs. M3 Mining | FleetPartners vs. Hutchison Telecommunications | FleetPartners vs. Sun Silver Limited |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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