Correlation Between Australia and National Australia
Can any of the company-specific risk be diversified away by investing in both Australia and National Australia 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 National Australia 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 National Australia Bank, you can compare the effects of market volatilities on Australia and National Australia 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 National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australia and National Australia.
Diversification Opportunities for Australia and National Australia
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Australia and National is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Australia and New and National Australia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Australia Bank 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 National Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Australia Bank has no effect on the direction of Australia i.e., Australia and National Australia go up and down completely randomly.
Pair Corralation between Australia and National Australia
Assuming the 90 days trading horizon Australia and New is expected to generate 3.76 times more return on investment than National Australia. However, Australia is 3.76 times more volatile than National Australia Bank. It trades about 0.11 of its potential returns per unit of risk. National Australia Bank is currently generating about 0.08 per unit of risk. If you would invest 2,099 in Australia and New on August 29, 2024 and sell it today you would earn a total of 1,031 from holding Australia and New or generate 49.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australia and New vs. National Australia Bank
Performance |
| Timeline |
| Australia and New |
| National Australia Bank |
Australia and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australia and National Australia
The main advantage of trading using opposite Australia and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australia position performs unexpectedly, National Australia 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 National Australia will offset losses from the drop in National Australia's long position.| Australia vs. Stelar Metals | Australia vs. Cleanaway Waste Management | Australia vs. Centaurus Metals | Australia vs. Patriot Battery Metals |
| National Australia vs. Westpac Banking | National Australia vs. Commonwealth Bank | National Australia vs. National Australia Bank | National Australia vs. Westpac Banking Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |