Correlation Between ANZ Group and Steamships Trading
Can any of the company-specific risk be diversified away by investing in both ANZ Group and Steamships Trading 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 ANZ Group and Steamships Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANZ Group Holdings and Steamships Trading, you can compare the effects of market volatilities on ANZ Group and Steamships Trading 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 ANZ Group with a short position of Steamships Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZ Group and Steamships Trading.
Diversification Opportunities for ANZ Group and Steamships Trading
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ANZ and Steamships is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and Steamships Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steamships Trading and ANZ 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 ANZ Group Holdings are associated (or correlated) with Steamships Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steamships Trading has no effect on the direction of ANZ Group i.e., ANZ Group and Steamships Trading go up and down completely randomly.
Pair Corralation between ANZ Group and Steamships Trading
Assuming the 90 days trading horizon ANZ Group Holdings is expected to under-perform the Steamships Trading. In addition to that, ANZ Group is 1.83 times more volatile than Steamships Trading. It trades about -0.02 of its total potential returns per unit of risk. Steamships Trading is currently generating about -0.02 per unit of volatility. If you would invest 1,387 in Steamships Trading on September 12, 2024 and sell it today you would lose (7.00) from holding Steamships Trading or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANZ Group Holdings vs. Steamships Trading
Performance |
| Timeline |
| ANZ Group Holdings |
| Steamships Trading |
ANZ Group and Steamships Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANZ Group and Steamships Trading
The main advantage of trading using opposite ANZ Group and Steamships Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANZ Group position performs unexpectedly, Steamships Trading 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 Steamships Trading will offset losses from the drop in Steamships Trading's long position.| ANZ Group vs. Aeris Environmental | ANZ Group vs. Bluescope Steel | ANZ Group vs. BKI Investment | ANZ Group vs. Flagship Investments |
| Steamships Trading vs. Red Hill Iron | Steamships Trading vs. K2 Asset Management | Steamships Trading vs. Cleanaway Waste Management | Steamships Trading vs. Hawsons Iron |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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