Correlation Between ABACUS STORAGE and Ironbark Capital
Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE and Ironbark Capital 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 Ironbark Capital 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 Ironbark Capital, you can compare the effects of market volatilities on ABACUS STORAGE and Ironbark Capital 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 Ironbark Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Ironbark Capital.
Diversification Opportunities for ABACUS STORAGE and Ironbark Capital
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ABACUS and Ironbark is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Ironbark Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ironbark Capital 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 Ironbark Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ironbark Capital has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Ironbark Capital go up and down completely randomly.
Pair Corralation between ABACUS STORAGE and Ironbark Capital
Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to generate 2.26 times more return on investment than Ironbark Capital. However, ABACUS STORAGE is 2.26 times more volatile than Ironbark Capital. It trades about -0.01 of its potential returns per unit of risk. Ironbark Capital is currently generating about -0.05 per unit of risk. If you would invest 116.00 in ABACUS STORAGE KING on November 7, 2024 and sell it today you would lose (2.00) from holding ABACUS STORAGE KING or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABACUS STORAGE KING vs. Ironbark Capital
Performance |
| Timeline |
| ABACUS STORAGE KING |
| Ironbark Capital |
ABACUS STORAGE and Ironbark Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABACUS STORAGE and Ironbark Capital
The main advantage of trading using opposite ABACUS STORAGE and Ironbark Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE position performs unexpectedly, Ironbark Capital 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 Ironbark Capital will offset losses from the drop in Ironbark Capital's long position.| ABACUS STORAGE vs. Odyssey Energy | ABACUS STORAGE vs. Macquarie Group | ABACUS STORAGE vs. Supply Network | ABACUS STORAGE vs. Commonwealth Bank |
| Ironbark Capital vs. Hutchison Telecommunications | Ironbark Capital vs. WiseTech Global Limited | Ironbark Capital vs. Pinnacle Investment Management | Ironbark Capital vs. K2 Asset 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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