Correlation Between Australian Unity and Origin Energy
Can any of the company-specific risk be diversified away by investing in both Australian Unity and Origin Energy 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 Origin Energy 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 Origin Energy, you can compare the effects of market volatilities on Australian Unity and Origin Energy 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 Origin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Unity and Origin Energy.
Diversification Opportunities for Australian Unity and Origin Energy
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Australian and Origin is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Australian Unity Office and Origin Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Energy 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 Origin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Energy has no effect on the direction of Australian Unity i.e., Australian Unity and Origin Energy go up and down completely randomly.
Pair Corralation between Australian Unity and Origin Energy
Assuming the 90 days trading horizon Australian Unity Office is expected to generate 0.33 times more return on investment than Origin Energy. However, Australian Unity Office is 3.04 times less risky than Origin Energy. It trades about 0.0 of its potential returns per unit of risk. Origin Energy is currently generating about -0.16 per unit of risk. If you would invest 109.00 in Australian Unity Office on November 8, 2024 and sell it today you would earn a total of 0.00 from holding Australian Unity Office or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Unity Office vs. Origin Energy
Performance |
| Timeline |
| Australian Unity Office |
| Origin Energy |
Australian Unity and Origin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Unity and Origin Energy
The main advantage of trading using opposite Australian Unity and Origin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Unity position performs unexpectedly, Origin Energy 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 Origin Energy will offset losses from the drop in Origin Energy's long position.| Australian Unity vs. Scentre Group | Australian Unity vs. Vicinity Centres Re | Australian Unity vs. Charter Hall Retail | Australian Unity vs. Cromwell Property Group |
| Origin Energy vs. Black Rock Mining | Origin Energy vs. Catalyst Metals | Origin Energy vs. MetalsGrove Mining | Origin Energy vs. Falcon 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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