Correlation Between Alternative Investment and Coles
Can any of the company-specific risk be diversified away by investing in both Alternative Investment and Coles 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 Alternative Investment and Coles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Investment Trust and Coles Group, you can compare the effects of market volatilities on Alternative Investment and Coles 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 Alternative Investment with a short position of Coles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Investment and Coles.
Diversification Opportunities for Alternative Investment and Coles
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alternative and Coles is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Investment Trust and Coles Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coles Group and Alternative Investment 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 Alternative Investment Trust are associated (or correlated) with Coles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coles Group has no effect on the direction of Alternative Investment i.e., Alternative Investment and Coles go up and down completely randomly.
Pair Corralation between Alternative Investment and Coles
Assuming the 90 days trading horizon Alternative Investment Trust is expected to generate 0.48 times more return on investment than Coles. However, Alternative Investment Trust is 2.07 times less risky than Coles. It trades about 0.09 of its potential returns per unit of risk. Coles Group is currently generating about 0.0 per unit of risk. If you would invest 141.00 in Alternative Investment Trust on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Alternative Investment Trust or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Alternative Investment Trust vs. Coles Group
Performance |
| Timeline |
| Alternative Investment |
| Coles Group |
Alternative Investment and Coles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternative Investment and Coles
The main advantage of trading using opposite Alternative Investment and Coles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Investment position performs unexpectedly, Coles 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 Coles will offset losses from the drop in Coles' long position.| Alternative Investment vs. Australian United Investment | Alternative Investment vs. Hutchison Telecommunications | Alternative Investment vs. BKI Investment | Alternative Investment vs. Saferoads Holdings |
| Coles vs. ACDC Metals | Coles vs. Diversified United Investment | Coles vs. Clime Investment Management | Coles vs. Auctus Alternative Investments |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |