Correlation Between Aurelia Metals and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals 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 Aurelia Metals and Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Westpac Banking, you can compare the effects of market volatilities on Aurelia Metals 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 Aurelia Metals with a short position of Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Westpac Banking.
Diversification Opportunities for Aurelia Metals and Westpac Banking
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aurelia and Westpac is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking and Aurelia 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 Aurelia Metals 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 Aurelia Metals i.e., Aurelia Metals and Westpac Banking go up and down completely randomly.
Pair Corralation between Aurelia Metals and Westpac Banking
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 16.67 times more return on investment than Westpac Banking. However, Aurelia Metals is 16.67 times more volatile than Westpac Banking. It trades about 0.04 of its potential returns per unit of risk. Westpac Banking is currently generating about 0.06 per unit of risk. If you would invest 13.00 in Aurelia Metals on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Aurelia Metals or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurelia Metals vs. Westpac Banking
Performance |
| Timeline |
| Aurelia Metals |
| Westpac Banking |
Aurelia Metals and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Westpac Banking
The main advantage of trading using opposite Aurelia Metals and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals 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.| Aurelia Metals vs. Northern Star Resources | Aurelia Metals vs. Evolution Mining | Aurelia Metals vs. Bluescope Steel | Aurelia Metals vs. Sandfire Resources NL |
| Westpac Banking vs. The Environmental Group | Westpac Banking vs. Aeris Environmental | Westpac Banking vs. Singular Health Group | Westpac Banking vs. Bisalloy Steel Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |