Correlation Between Australian United and Calix
Can any of the company-specific risk be diversified away by investing in both Australian United and Calix 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 United and Calix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian United Investment and Calix, you can compare the effects of market volatilities on Australian United and Calix 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 United with a short position of Calix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian United and Calix.
Diversification Opportunities for Australian United and Calix
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Australian and Calix is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Australian United Investment and Calix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calix and Australian United 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 United Investment are associated (or correlated) with Calix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calix has no effect on the direction of Australian United i.e., Australian United and Calix go up and down completely randomly.
Pair Corralation between Australian United and Calix
Assuming the 90 days trading horizon Australian United Investment is expected to generate 0.15 times more return on investment than Calix. However, Australian United Investment is 6.81 times less risky than Calix. It trades about -0.18 of its potential returns per unit of risk. Calix is currently generating about -0.09 per unit of risk. If you would invest 1,096 in Australian United Investment on September 14, 2024 and sell it today you would lose (28.00) from holding Australian United Investment or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian United Investment vs. Calix
Performance |
| Timeline |
| Australian United |
| Calix |
Australian United and Calix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian United and Calix
The main advantage of trading using opposite Australian United and Calix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian United position performs unexpectedly, Calix 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 Calix will offset losses from the drop in Calix's long position.| Australian United vs. Stelar Metals | Australian United vs. Carnegie Clean Energy | Australian United vs. Sky Metals | Australian United vs. Air New Zealand |
| Calix vs. Centuria Industrial Reit | Calix vs. Australian United Investment | Calix vs. Retail Food Group | Calix vs. Flagship Investments |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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