Correlation Between ASX and Bank of Queensland
Can any of the company-specific risk be diversified away by investing in both ASX and Bank of Queensland 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 ASX and Bank of Queensland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASX and Bank of Queensland, you can compare the effects of market volatilities on ASX and Bank of Queensland 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 ASX with a short position of Bank of Queensland. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASX and Bank of Queensland.
Diversification Opportunities for ASX and Bank of Queensland
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ASX and Bank is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ASX and Bank of Queensland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Queensland and ASX 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 ASX are associated (or correlated) with Bank of Queensland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Queensland has no effect on the direction of ASX i.e., ASX and Bank of Queensland go up and down completely randomly.
Pair Corralation between ASX and Bank of Queensland
Assuming the 90 days trading horizon ASX is expected to generate 4.03 times more return on investment than Bank of Queensland. However, ASX is 4.03 times more volatile than Bank of Queensland. It trades about 0.13 of its potential returns per unit of risk. Bank of Queensland is currently generating about -0.11 per unit of risk. If you would invest 6,554 in ASX on September 13, 2024 and sell it today you would earn a total of 246.00 from holding ASX or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASX vs. Bank of Queensland
Performance |
| Timeline |
| ASX |
| Bank of Queensland |
ASX and Bank of Queensland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASX and Bank of Queensland
The main advantage of trading using opposite ASX and Bank of Queensland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASX position performs unexpectedly, Bank of Queensland 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 Bank of Queensland will offset losses from the drop in Bank of Queensland's long position.| ASX vs. Aneka Tambang Tbk | ASX vs. National Australia Bank | ASX vs. Commonwealth Bank of | ASX vs. Commonwealth Bank of |
| Bank of Queensland vs. Ras Technology Holdings | Bank of Queensland vs. COAST ENTERTAINMENT HOLDINGS | Bank of Queensland vs. Infomedia | Bank of Queensland vs. TPG Telecom |
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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