Correlation Between Australia and Argo Investments
Can any of the company-specific risk be diversified away by investing in both Australia and Argo Investments 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 Australia and Argo Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australia and New and Argo Investments, you can compare the effects of market volatilities on Australia and Argo Investments 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 Australia with a short position of Argo Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australia and Argo Investments.
Diversification Opportunities for Australia and Argo Investments
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Australia and Argo is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Australia and New and Argo Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Investments and Australia 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 Australia and New are associated (or correlated) with Argo Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Investments has no effect on the direction of Australia i.e., Australia and Argo Investments go up and down completely randomly.
Pair Corralation between Australia and Argo Investments
Assuming the 90 days trading horizon Australia and New is expected to generate 1.93 times more return on investment than Argo Investments. However, Australia is 1.93 times more volatile than Argo Investments. It trades about 0.26 of its potential returns per unit of risk. Argo Investments is currently generating about 0.11 per unit of risk. If you would invest 2,860 in Australia and New on October 24, 2024 and sell it today you would earn a total of 155.00 from holding Australia and New or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australia and New vs. Argo Investments
Performance |
| Timeline |
| Australia and New |
| Argo Investments |
Australia and Argo Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australia and Argo Investments
The main advantage of trading using opposite Australia and Argo Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australia position performs unexpectedly, Argo Investments 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 Argo Investments will offset losses from the drop in Argo Investments' long position.| Australia vs. Legacy Iron Ore | Australia vs. Lendlease Group | Australia vs. Champion Iron | Australia vs. Southern Cross Media |
| Argo Investments vs. Aneka Tambang Tbk | Argo Investments vs. Commonwealth Bank of | Argo Investments vs. Australia and New | Argo Investments vs. ANZ Group Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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