Correlation Between Australia and X2M Connect
Can any of the company-specific risk be diversified away by investing in both Australia and X2M Connect 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 X2M Connect 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 X2M Connect, you can compare the effects of market volatilities on Australia and X2M Connect 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 X2M Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australia and X2M Connect.
Diversification Opportunities for Australia and X2M Connect
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Australia and X2M is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Australia and New and X2M Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X2M Connect 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 X2M Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X2M Connect has no effect on the direction of Australia i.e., Australia and X2M Connect go up and down completely randomly.
Pair Corralation between Australia and X2M Connect
Assuming the 90 days trading horizon Australia and New is expected to generate 0.31 times more return on investment than X2M Connect. However, Australia and New is 3.18 times less risky than X2M Connect. It trades about 0.1 of its potential returns per unit of risk. X2M Connect is currently generating about -0.04 per unit of risk. If you would invest 2,785 in Australia and New on August 30, 2024 and sell it today you would earn a total of 365.00 from holding Australia and New or generate 13.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.66% |
| Values | Daily Returns |
Australia and New vs. X2M Connect
Performance |
| Timeline |
| Australia and New |
| X2M Connect |
Australia and X2M Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australia and X2M Connect
The main advantage of trading using opposite Australia and X2M Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australia position performs unexpectedly, X2M Connect 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 X2M Connect will offset losses from the drop in X2M Connect's long position.| Australia vs. Clime Investment Management | Australia vs. Australian United Investment | Australia vs. A1 Investments Resources | Australia vs. Diversified United Investment |
| X2M Connect vs. Hudson Investment Group | X2M Connect vs. Garda Diversified Ppty | X2M Connect vs. Advanced Braking Technology | X2M Connect vs. A1 Investments Resources |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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