Correlation Between Australian Unity and CSL
Can any of the company-specific risk be diversified away by investing in both Australian Unity and CSL 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 CSL 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 CSL, you can compare the effects of market volatilities on Australian Unity and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Unity and CSL.
Diversification Opportunities for Australian Unity and CSL
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Australian and CSL is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Australian Unity Office and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Australian Unity i.e., Australian Unity and CSL go up and down completely randomly.
Pair Corralation between Australian Unity and CSL
Assuming the 90 days trading horizon Australian Unity Office is expected to under-perform the CSL. In addition to that, Australian Unity is 2.02 times more volatile than CSL. It trades about -0.01 of its total potential returns per unit of risk. CSL is currently generating about 0.01 per unit of volatility. If you would invest 27,810 in CSL on September 14, 2024 and sell it today you would earn a total of 24.00 from holding CSL or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Unity Office vs. CSL
Performance |
| Timeline |
| Australian Unity Office |
| CSL |
Australian Unity and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Unity and CSL
The main advantage of trading using opposite Australian Unity and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Unity position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Australian Unity vs. Advanced Braking Technology | Australian Unity vs. Stelar Metals | Australian Unity vs. Bio Gene Technology | Australian Unity vs. GreenX Metals |
| CSL vs. Australian Unity Office | CSL vs. Farm Pride Foods | CSL vs. Beston Global Food | CSL vs. Cleanaway Waste Management |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |