Correlation Between Australian Unity and Truscott Mining
Can any of the company-specific risk be diversified away by investing in both Australian Unity and Truscott Mining 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 Truscott Mining 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 Truscott Mining Corp, you can compare the effects of market volatilities on Australian Unity and Truscott Mining 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 Truscott Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Unity and Truscott Mining.
Diversification Opportunities for Australian Unity and Truscott Mining
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Australian and Truscott is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Australian Unity Office and Truscott Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truscott Mining Corp 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 Truscott Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truscott Mining Corp has no effect on the direction of Australian Unity i.e., Australian Unity and Truscott Mining go up and down completely randomly.
Pair Corralation between Australian Unity and Truscott Mining
Assuming the 90 days trading horizon Australian Unity Office is expected to generate 0.2 times more return on investment than Truscott Mining. However, Australian Unity Office is 5.05 times less risky than Truscott Mining. It trades about 0.21 of its potential returns per unit of risk. Truscott Mining Corp is currently generating about 0.01 per unit of risk. If you would invest 105.00 in Australian Unity Office on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Australian Unity Office or generate 4.76% 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. Truscott Mining Corp
Performance |
| Timeline |
| Australian Unity Office |
| Truscott Mining Corp |
Australian Unity and Truscott Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Unity and Truscott Mining
The main advantage of trading using opposite Australian Unity and Truscott Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Unity position performs unexpectedly, Truscott Mining 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 Truscott Mining will offset losses from the drop in Truscott Mining's long position.| Australian Unity vs. Bank of Queensland | Australian Unity vs. BSP Financial Group | Australian Unity vs. COG Financial Services | Australian Unity vs. Dalaroo Metals |
| Truscott Mining vs. Perseus Mining | Truscott Mining vs. DMC Mining | Truscott Mining vs. Peel Mining | Truscott Mining vs. Pinnacle Investment 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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