Correlation Between Australian Strategic and Gtn
Can any of the company-specific risk be diversified away by investing in both Australian Strategic and Gtn 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 Australian Strategic and Gtn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Strategic Materials and Gtn, you can compare the effects of market volatilities on Australian Strategic and Gtn 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 Australian Strategic with a short position of Gtn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Strategic and Gtn.
Diversification Opportunities for Australian Strategic and Gtn
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Australian and Gtn is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Australian Strategic Materials and Gtn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gtn and Australian Strategic 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 Australian Strategic Materials are associated (or correlated) with Gtn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gtn has no effect on the direction of Australian Strategic i.e., Australian Strategic and Gtn go up and down completely randomly.
Pair Corralation between Australian Strategic and Gtn
Assuming the 90 days trading horizon Australian Strategic Materials is expected to generate 1.62 times more return on investment than Gtn. However, Australian Strategic is 1.62 times more volatile than Gtn. It trades about -0.2 of its potential returns per unit of risk. Gtn is currently generating about -0.47 per unit of risk. If you would invest 53.00 in Australian Strategic Materials on November 1, 2024 and sell it today you would lose (5.00) from holding Australian Strategic Materials or give up 9.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Australian Strategic Materials vs. Gtn
Performance |
| Timeline |
| Australian Strategic |
| Gtn |
Australian Strategic and Gtn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Strategic and Gtn
The main advantage of trading using opposite Australian Strategic and Gtn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Strategic position performs unexpectedly, Gtn 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 Gtn will offset losses from the drop in Gtn's long position.| Australian Strategic vs. Regis Healthcare | Australian Strategic vs. AiMedia Technologies | Australian Strategic vs. Spirit Telecom | Australian Strategic vs. Autosports Group |
| Gtn vs. Black Rock Mining | Gtn vs. Australian Strategic Materials | Gtn vs. Aurelia Metals | Gtn vs. Dalaroo Metals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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