Correlation Between Actinogen Medical and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Actinogen Medical and Westpac Banking 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 Actinogen Medical and Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Actinogen Medical and Westpac Banking, you can compare the effects of market volatilities on Actinogen Medical and Westpac Banking 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 Actinogen Medical with a short position of Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Actinogen Medical and Westpac Banking.
Diversification Opportunities for Actinogen Medical and Westpac Banking
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Actinogen and Westpac is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Actinogen Medical and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking and Actinogen Medical 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 Actinogen Medical are associated (or correlated) with Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Actinogen Medical i.e., Actinogen Medical and Westpac Banking go up and down completely randomly.
Pair Corralation between Actinogen Medical and Westpac Banking
Assuming the 90 days trading horizon Actinogen Medical is expected to generate 11.93 times more return on investment than Westpac Banking. However, Actinogen Medical is 11.93 times more volatile than Westpac Banking. It trades about 0.26 of its potential returns per unit of risk. Westpac Banking is currently generating about -0.03 per unit of risk. If you would invest 2.50 in Actinogen Medical on November 7, 2024 and sell it today you would earn a total of 0.40 from holding Actinogen Medical or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Actinogen Medical vs. Westpac Banking
Performance |
| Timeline |
| Actinogen Medical |
| Westpac Banking |
Actinogen Medical and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Actinogen Medical and Westpac Banking
The main advantage of trading using opposite Actinogen Medical and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Actinogen Medical position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Actinogen Medical vs. Vulcan Steel | Actinogen Medical vs. Kneomedia | Actinogen Medical vs. Phoslock Environmental Technologies | Actinogen Medical vs. Readytech Holdings |
| Westpac Banking vs. Commonwealth Bank of | Westpac Banking vs. M3 Mining | Westpac Banking vs. Truscott Mining Corp | Westpac Banking vs. Metro Mining |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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