Correlation Between Althea Group and Australian Unity
Can any of the company-specific risk be diversified away by investing in both Althea Group and Australian Unity 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 Althea Group and Australian Unity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Althea Group Holdings and Australian Unity Office, you can compare the effects of market volatilities on Althea Group and Australian Unity 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 Althea Group with a short position of Australian Unity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Althea Group and Australian Unity.
Diversification Opportunities for Althea Group and Australian Unity
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Althea and Australian is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Althea Group Holdings and Australian Unity Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Unity Office and Althea Group 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 Althea Group Holdings are associated (or correlated) with Australian Unity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Unity Office has no effect on the direction of Althea Group i.e., Althea Group and Australian Unity go up and down completely randomly.
Pair Corralation between Althea Group and Australian Unity
Assuming the 90 days trading horizon Althea Group is expected to generate 1.04 times less return on investment than Australian Unity. In addition to that, Althea Group is 2.98 times more volatile than Australian Unity Office. It trades about 0.02 of its total potential returns per unit of risk. Australian Unity Office is currently generating about 0.05 per unit of volatility. If you would invest 90.00 in Australian Unity Office on November 2, 2024 and sell it today you would earn a total of 20.00 from holding Australian Unity Office or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Althea Group Holdings vs. Australian Unity Office
Performance |
| Timeline |
| Althea Group Holdings |
| Australian Unity Office |
Althea Group and Australian Unity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Althea Group and Australian Unity
The main advantage of trading using opposite Althea Group and Australian Unity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Althea Group position performs unexpectedly, Australian Unity 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 Australian Unity will offset losses from the drop in Australian Unity's long position.| Althea Group vs. Super Retail Group | Althea Group vs. Liberty Financial Group | Althea Group vs. Magellan Financial Group | Althea Group vs. Retail Food Group |
| Australian Unity vs. Chalice Mining Limited | Australian Unity vs. Mirrabooka Investments | Australian Unity vs. Clime Investment Management | Australian Unity vs. M3 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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