Correlation Between Austal and Green Technology
Can any of the company-specific risk be diversified away by investing in both Austal and Green Technology 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 Austal and Green Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austal and Green Technology Metals, you can compare the effects of market volatilities on Austal and Green Technology 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 Austal with a short position of Green Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austal and Green Technology.
Diversification Opportunities for Austal and Green Technology
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Austal and Green is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Austal and Green Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Technology Metals and Austal 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 Austal are associated (or correlated) with Green Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Technology Metals has no effect on the direction of Austal i.e., Austal and Green Technology go up and down completely randomly.
Pair Corralation between Austal and Green Technology
Assuming the 90 days trading horizon Austal is expected to under-perform the Green Technology. But the stock apears to be less risky and, when comparing its historical volatility, Austal is 3.29 times less risky than Green Technology. The stock trades about -0.42 of its potential returns per unit of risk. The Green Technology Metals is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 7.30 in Green Technology Metals on September 13, 2024 and sell it today you would lose (1.10) from holding Green Technology Metals or give up 15.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austal vs. Green Technology Metals
Performance |
| Timeline |
| Austal |
| Green Technology Metals |
Austal and Green Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austal and Green Technology
The main advantage of trading using opposite Austal and Green Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austal position performs unexpectedly, Green Technology 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 Green Technology will offset losses from the drop in Green Technology's long position.| Austal vs. Audio Pixels Holdings | Austal vs. Norwest Minerals | Austal vs. Lindian Resources | Austal vs. Resource Base |
| Green Technology vs. Thorney Technologies | Green Technology vs. Ainsworth Game Technology | Green Technology vs. Mach7 Technologies | Green Technology vs. Richmond Vanadium Technology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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