Correlation Between Asara Resources and Australian Unity
Can any of the company-specific risk be diversified away by investing in both Asara Resources and Australian Unity 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 Asara Resources and Australian Unity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asara Resources and Australian Unity Office, you can compare the effects of market volatilities on Asara Resources and Australian Unity 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 Asara Resources with a short position of Australian Unity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asara Resources and Australian Unity.
Diversification Opportunities for Asara Resources and Australian Unity
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asara and Australian is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Asara Resources and Australian Unity Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Unity Office and Asara Resources 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 Asara Resources are associated (or correlated) with Australian Unity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Unity Office has no effect on the direction of Asara Resources i.e., Asara Resources and Australian Unity go up and down completely randomly.
Pair Corralation between Asara Resources and Australian Unity
Assuming the 90 days trading horizon Asara Resources is expected to generate 2.79 times more return on investment than Australian Unity. However, Asara Resources is 2.79 times more volatile than Australian Unity Office. It trades about 0.02 of its potential returns per unit of risk. Australian Unity Office is currently generating about -0.01 per unit of risk. If you would invest 3.30 in Asara Resources on September 4, 2024 and sell it today you would lose (1.00) from holding Asara Resources or give up 30.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Asara Resources vs. Australian Unity Office
Performance |
| Timeline |
| Asara Resources |
| Australian Unity Office |
Asara Resources and Australian Unity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asara Resources and Australian Unity
The main advantage of trading using opposite Asara Resources and Australian Unity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asara Resources position performs unexpectedly, Australian Unity 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 Australian Unity will offset losses from the drop in Australian Unity's long position.| Asara Resources vs. Steamships Trading | Asara Resources vs. Capitol Health | Asara Resources vs. BTC Health Limited | Asara Resources vs. Pinnacle Investment Management |
| Australian Unity vs. Scentre Group | Australian Unity vs. Vicinity Centres Re | Australian Unity vs. Charter Hall Retail | Australian Unity vs. Carindale Property Trust |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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