Correlation Between Australian Unity and Sandfire Resources
Can any of the company-specific risk be diversified away by investing in both Australian Unity and Sandfire Resources 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 Sandfire Resources 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 Sandfire Resources NL, you can compare the effects of market volatilities on Australian Unity and Sandfire Resources 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 Sandfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Unity and Sandfire Resources.
Diversification Opportunities for Australian Unity and Sandfire Resources
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Australian and Sandfire is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Australian Unity Office and Sandfire Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandfire 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 Sandfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandfire Resources has no effect on the direction of Australian Unity i.e., Australian Unity and Sandfire Resources go up and down completely randomly.
Pair Corralation between Australian Unity and Sandfire Resources
Assuming the 90 days trading horizon Australian Unity Office is expected to under-perform the Sandfire Resources. But the stock apears to be less risky and, when comparing its historical volatility, Australian Unity Office is 1.5 times less risky than Sandfire Resources. The stock trades about -0.24 of its potential returns per unit of risk. The Sandfire Resources NL is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Sandfire Resources NL on September 15, 2024 and sell it today you would earn a total of 1.00 from holding Sandfire Resources NL or generate 0.1% 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. Sandfire Resources NL
Performance |
| Timeline |
| Australian Unity Office |
| Sandfire Resources |
Australian Unity and Sandfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Unity and Sandfire Resources
The main advantage of trading using opposite Australian Unity and Sandfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Unity position performs unexpectedly, Sandfire Resources 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 Sandfire Resources will offset losses from the drop in Sandfire Resources' long position.| Australian Unity vs. National Storage REIT | Australian Unity vs. Hutchison Telecommunications | Australian Unity vs. Aeris Environmental | Australian Unity vs. Bisalloy Steel Group |
| Sandfire Resources vs. Premier Investments | Sandfire Resources vs. Aristocrat Leisure | Sandfire Resources vs. Alternative Investment Trust | Sandfire Resources vs. Australian Unity Office |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |