Correlation Between ABACUS STORAGE and Carawine Resources
Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE and Carawine 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 ABACUS STORAGE and Carawine Resources 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 Carawine Resources Limited, you can compare the effects of market volatilities on ABACUS STORAGE and Carawine 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 ABACUS STORAGE with a short position of Carawine Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Carawine Resources.
Diversification Opportunities for ABACUS STORAGE and Carawine Resources
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ABACUS and Carawine is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Carawine Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carawine Resources 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 Carawine Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carawine Resources has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Carawine Resources go up and down completely randomly.
Pair Corralation between ABACUS STORAGE and Carawine Resources
Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to under-perform the Carawine Resources. But the stock apears to be less risky and, when comparing its historical volatility, ABACUS STORAGE KING is 4.3 times less risky than Carawine Resources. The stock trades about -0.06 of its potential returns per unit of risk. The Carawine Resources Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 9.50 in Carawine Resources Limited on September 2, 2024 and sell it today you would earn a total of 1.50 from holding Carawine Resources Limited or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABACUS STORAGE KING vs. Carawine Resources Limited
Performance |
| Timeline |
| ABACUS STORAGE KING |
| Carawine Resources |
ABACUS STORAGE and Carawine Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABACUS STORAGE and Carawine Resources
The main advantage of trading using opposite ABACUS STORAGE and Carawine Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE position performs unexpectedly, Carawine 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 Carawine Resources will offset losses from the drop in Carawine Resources' long position.| ABACUS STORAGE vs. Westpac Banking | ABACUS STORAGE vs. Odyssey Energy | ABACUS STORAGE vs. Imricor Medical Systems | ABACUS STORAGE vs. Midway |
| Carawine Resources vs. Northern Star Resources | Carawine Resources vs. Evolution Mining | Carawine Resources vs. Bluescope Steel | Carawine Resources vs. Sandfire Resources NL |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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