Correlation Between Australian Unity and Coronado Global
Can any of the company-specific risk be diversified away by investing in both Australian Unity and Coronado Global 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 Coronado Global 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 Coronado Global Resources, you can compare the effects of market volatilities on Australian Unity and Coronado Global 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 Coronado Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Unity and Coronado Global.
Diversification Opportunities for Australian Unity and Coronado Global
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Australian and Coronado is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Australian Unity Office and Coronado Global Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronado Global Resources 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 Coronado Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronado Global Resources has no effect on the direction of Australian Unity i.e., Australian Unity and Coronado Global go up and down completely randomly.
Pair Corralation between Australian Unity and Coronado Global
Assuming the 90 days trading horizon Australian Unity Office is expected to generate 0.83 times more return on investment than Coronado Global. However, Australian Unity Office is 1.21 times less risky than Coronado Global. It trades about 0.0 of its potential returns per unit of risk. Coronado Global Resources is currently generating about -0.04 per unit of risk. If you would invest 120.00 in Australian Unity Office on September 2, 2024 and sell it today you would lose (14.00) from holding Australian Unity Office or give up 11.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Unity Office vs. Coronado Global Resources
Performance |
| Timeline |
| Australian Unity Office |
| Coronado Global Resources |
Australian Unity and Coronado Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Unity and Coronado Global
The main advantage of trading using opposite Australian Unity and Coronado Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Unity position performs unexpectedly, Coronado Global 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 Coronado Global will offset losses from the drop in Coronado Global'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 |
| Coronado Global vs. Charter Hall Education | Coronado Global vs. Global Health | Coronado Global vs. Black Rock Mining | Coronado Global vs. Epsilon Healthcare |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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