Correlation Between ACDC Metals and National Australia
Can any of the company-specific risk be diversified away by investing in both ACDC Metals and National Australia 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 ACDC Metals and National Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACDC Metals and National Australia Bank, you can compare the effects of market volatilities on ACDC Metals and National Australia 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 ACDC Metals with a short position of National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACDC Metals and National Australia.
Diversification Opportunities for ACDC Metals and National Australia
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ACDC and National is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding ACDC Metals and National Australia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Australia Bank and ACDC Metals 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 ACDC Metals are associated (or correlated) with National Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Australia Bank has no effect on the direction of ACDC Metals i.e., ACDC Metals and National Australia go up and down completely randomly.
Pair Corralation between ACDC Metals and National Australia
Assuming the 90 days trading horizon ACDC Metals is expected to under-perform the National Australia. In addition to that, ACDC Metals is 15.23 times more volatile than National Australia Bank. It trades about -0.07 of its total potential returns per unit of risk. National Australia Bank is currently generating about 0.01 per unit of volatility. If you would invest 10,388 in National Australia Bank on October 13, 2024 and sell it today you would earn a total of 7.00 from holding National Australia Bank or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACDC Metals vs. National Australia Bank
Performance |
| Timeline |
| ACDC Metals |
| National Australia Bank |
ACDC Metals and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACDC Metals and National Australia
The main advantage of trading using opposite ACDC Metals and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACDC Metals position performs unexpectedly, National Australia 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 National Australia will offset losses from the drop in National Australia's long position.| ACDC Metals vs. Truscott Mining Corp | ACDC Metals vs. Aurelia Metals | ACDC Metals vs. Falcon Metals | ACDC Metals vs. Duketon Mining |
| National Australia vs. Super Retail Group | National Australia vs. Centrex Metals | National Australia vs. Sky Metals | National Australia vs. ACDC Metals |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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