Correlation Between ABACUS STORAGE and Capricorn Metals
Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE and Capricorn Metals 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 ABACUS STORAGE and Capricorn Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABACUS STORAGE KING and Capricorn Metals, you can compare the effects of market volatilities on ABACUS STORAGE and Capricorn Metals 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 ABACUS STORAGE with a short position of Capricorn Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Capricorn Metals.
Diversification Opportunities for ABACUS STORAGE and Capricorn Metals
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ABACUS and Capricorn is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Capricorn Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricorn Metals and ABACUS STORAGE 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 ABACUS STORAGE KING are associated (or correlated) with Capricorn Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capricorn Metals has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Capricorn Metals go up and down completely randomly.
Pair Corralation between ABACUS STORAGE and Capricorn Metals
Assuming the 90 days trading horizon ABACUS STORAGE is expected to generate 3.76 times less return on investment than Capricorn Metals. In addition to that, ABACUS STORAGE is 1.34 times more volatile than Capricorn Metals. It trades about 0.08 of its total potential returns per unit of risk. Capricorn Metals is currently generating about 0.42 per unit of volatility. If you would invest 647.00 in Capricorn Metals on October 24, 2024 and sell it today you would earn a total of 79.00 from holding Capricorn Metals or generate 12.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
ABACUS STORAGE KING vs. Capricorn Metals
Performance |
| Timeline |
| ABACUS STORAGE KING |
| Capricorn Metals |
ABACUS STORAGE and Capricorn Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABACUS STORAGE and Capricorn Metals
The main advantage of trading using opposite ABACUS STORAGE and Capricorn Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE position performs unexpectedly, Capricorn Metals 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 Capricorn Metals will offset losses from the drop in Capricorn Metals' long position.| ABACUS STORAGE vs. Westpac Banking | ABACUS STORAGE vs. Odyssey Energy | ABACUS STORAGE vs. Kip McGrath Education | ABACUS STORAGE vs. Southern Cross Media |
| Capricorn Metals vs. Djerriwarrh Investments | Capricorn Metals vs. Charter Hall Retail | Capricorn Metals vs. Land Homes Group | Capricorn Metals 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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