Correlation Between Australian Unity and British Amer
Can any of the company-specific risk be diversified away by investing in both Australian Unity and British Amer 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 Australian Unity and British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Unity Office and Bailador Technology Invest, you can compare the effects of market volatilities on Australian Unity and British Amer 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 Australian Unity with a short position of British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Unity and British Amer.
Diversification Opportunities for Australian Unity and British Amer
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Australian and British is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Australian Unity Office and Bailador Technology Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bailador Technology and Australian Unity 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 Australian Unity Office are associated (or correlated) with British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bailador Technology has no effect on the direction of Australian Unity i.e., Australian Unity and British Amer go up and down completely randomly.
Pair Corralation between Australian Unity and British Amer
Assuming the 90 days trading horizon Australian Unity is expected to generate 18.54 times less return on investment than British Amer. In addition to that, Australian Unity is 1.89 times more volatile than Bailador Technology Invest. It trades about 0.0 of its total potential returns per unit of risk. Bailador Technology Invest is currently generating about 0.04 per unit of volatility. If you would invest 108.00 in Bailador Technology Invest on September 2, 2024 and sell it today you would earn a total of 18.00 from holding Bailador Technology Invest or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Unity Office vs. Bailador Technology Invest
Performance |
| Timeline |
| Australian Unity Office |
| Bailador Technology |
Australian Unity and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Unity and British Amer
The main advantage of trading using opposite Australian Unity and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Unity position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.| Australian Unity vs. Bank of Queensland | Australian Unity vs. Finexia Financial Group | Australian Unity vs. Wt Financial Group | Australian Unity vs. WiseTech Global Limited |
| British Amer vs. WA1 Resources | British Amer vs. Predictive Discovery | British Amer vs. Cooper Metals | British Amer vs. OD6 Metals |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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