Correlation Between Astar and National Australia
Can any of the company-specific risk be diversified away by investing in both Astar and National Australia 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 Astar and National Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and National Australia Bank, you can compare the effects of market volatilities on Astar and National Australia 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 Astar with a short position of National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and National Australia.
Diversification Opportunities for Astar and National Australia
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astar and National is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Astar and National Australia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Australia Bank and Astar 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 Astar are associated (or correlated) with National Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Australia Bank has no effect on the direction of Astar i.e., Astar and National Australia go up and down completely randomly.
Pair Corralation between Astar and National Australia
Assuming the 90 days trading horizon Astar is expected to under-perform the National Australia. In addition to that, Astar is 9.0 times more volatile than National Australia Bank. It trades about 0.0 of its total potential returns per unit of risk. National Australia Bank is currently generating about 0.04 per unit of volatility. If you would invest 10,278 in National Australia Bank on November 2, 2024 and sell it today you would earn a total of 242.00 from holding National Australia Bank or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.2% |
| Values | Daily Returns |
Astar vs. National Australia Bank
Performance |
| Timeline |
| Astar |
| National Australia Bank |
Astar and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and National Australia
The main advantage of trading using opposite Astar and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, National Australia 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 National Australia will offset losses from the drop in National Australia's long position.The idea behind Astar and National Australia Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| National Australia vs. Microequities Asset Management | National Australia vs. Vitura Health Limited | National Australia vs. Readytech Holdings | National Australia vs. Nufarm Finance NZ |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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