Correlation Between Australia and Aumake
Can any of the company-specific risk be diversified away by investing in both Australia and Aumake 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 Aumake 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 Aumake, you can compare the effects of market volatilities on Australia and Aumake 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 Aumake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australia and Aumake.
Diversification Opportunities for Australia and Aumake
Excellent diversification
The 3 months correlation between Australia and Aumake is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Australia and New and Aumake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aumake 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 Aumake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aumake has no effect on the direction of Australia i.e., Australia and Aumake go up and down completely randomly.
Pair Corralation between Australia and Aumake
Assuming the 90 days trading horizon Australia is expected to generate 1.63 times less return on investment than Aumake. But when comparing it to its historical volatility, Australia and New is 9.97 times less risky than Aumake. It trades about 0.27 of its potential returns per unit of risk. Aumake is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.50 in Aumake on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Aumake or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australia and New vs. Aumake
Performance |
| Timeline |
| Australia and New |
| Aumake |
Australia and Aumake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australia and Aumake
The main advantage of trading using opposite Australia and Aumake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australia position performs unexpectedly, Aumake 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 Aumake will offset losses from the drop in Aumake's long position.| Australia vs. Home Consortium | Australia vs. Queste Communications | Australia vs. Australian Unity Office | Australia vs. ACDC Metals |
| Aumake vs. Readytech Holdings | Aumake vs. Ainsworth Game Technology | Aumake vs. Ras Technology Holdings | Aumake vs. Computershare |
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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