Correlation Between ABACUS STORAGE and Whitehaven Coal
Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE and Whitehaven Coal 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 Whitehaven Coal 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 Whitehaven Coal, you can compare the effects of market volatilities on ABACUS STORAGE and Whitehaven Coal 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 Whitehaven Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Whitehaven Coal.
Diversification Opportunities for ABACUS STORAGE and Whitehaven Coal
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ABACUS and Whitehaven is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Whitehaven Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitehaven Coal 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 Whitehaven Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitehaven Coal has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Whitehaven Coal go up and down completely randomly.
Pair Corralation between ABACUS STORAGE and Whitehaven Coal
Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to generate 30.34 times more return on investment than Whitehaven Coal. However, ABACUS STORAGE is 30.34 times more volatile than Whitehaven Coal. It trades about 0.06 of its potential returns per unit of risk. Whitehaven Coal is currently generating about 0.0 per unit of risk. If you would invest 113.00 in ABACUS STORAGE KING on September 4, 2024 and sell it today you would earn a total of 9.00 from holding ABACUS STORAGE KING or generate 7.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
ABACUS STORAGE KING vs. Whitehaven Coal
Performance |
| Timeline |
| ABACUS STORAGE KING |
| Whitehaven Coal |
ABACUS STORAGE and Whitehaven Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABACUS STORAGE and Whitehaven Coal
The main advantage of trading using opposite ABACUS STORAGE and Whitehaven Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE position performs unexpectedly, Whitehaven Coal 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 Whitehaven Coal will offset losses from the drop in Whitehaven Coal's long position.| ABACUS STORAGE vs. Westpac Banking | ABACUS STORAGE vs. Odyssey Energy | ABACUS STORAGE vs. Bisalloy Steel Group | ABACUS STORAGE vs. Fortescue |
| Whitehaven Coal vs. Westpac Banking | Whitehaven Coal vs. ABACUS STORAGE KING | Whitehaven Coal vs. Odyssey Energy | Whitehaven Coal vs. Summit Resources Limited |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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