Correlation Between AMP and Eureka Group
Can any of the company-specific risk be diversified away by investing in both AMP and Eureka Group 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 AMP and Eureka Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMP and Eureka Group Holdings, you can compare the effects of market volatilities on AMP and Eureka Group 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 AMP with a short position of Eureka Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMP and Eureka Group.
Diversification Opportunities for AMP and Eureka Group
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMP and Eureka is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding AMP and Eureka Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eureka Group Holdings and AMP 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 AMP are associated (or correlated) with Eureka Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eureka Group Holdings has no effect on the direction of AMP i.e., AMP and Eureka Group go up and down completely randomly.
Pair Corralation between AMP and Eureka Group
Assuming the 90 days trading horizon AMP is expected to generate 1.47 times less return on investment than Eureka Group. In addition to that, AMP is 1.13 times more volatile than Eureka Group Holdings. It trades about 0.03 of its total potential returns per unit of risk. Eureka Group Holdings is currently generating about 0.05 per unit of volatility. If you would invest 39.00 in Eureka Group Holdings on August 27, 2024 and sell it today you would earn a total of 20.00 from holding Eureka Group Holdings or generate 51.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMP vs. Eureka Group Holdings
Performance |
| Timeline |
| AMP |
| Eureka Group Holdings |
AMP and Eureka Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMP and Eureka Group
The main advantage of trading using opposite AMP and Eureka Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMP position performs unexpectedly, Eureka Group 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 Eureka Group will offset losses from the drop in Eureka Group's long position.The idea behind AMP and Eureka Group Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Eureka Group vs. Lendlease Group | Eureka Group vs. Dug Technology | Eureka Group vs. Qbe Insurance Group | Eureka Group vs. Magellan Financial 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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