Correlation Between SPASX Dividend and Auswide Bank
Can any of the company-specific risk be diversified away by investing in both SPASX Dividend and Auswide Bank 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 SPASX Dividend and Auswide Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPASX Dividend Opportunities and Auswide Bank, you can compare the effects of market volatilities on SPASX Dividend and Auswide Bank 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 SPASX Dividend with a short position of Auswide Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX Dividend and Auswide Bank.
Diversification Opportunities for SPASX Dividend and Auswide Bank
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SPASX and Auswide is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SPASX Dividend Opportunities and Auswide Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auswide Bank and SPASX Dividend 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 SPASX Dividend Opportunities are associated (or correlated) with Auswide Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auswide Bank has no effect on the direction of SPASX Dividend i.e., SPASX Dividend and Auswide Bank go up and down completely randomly.
Pair Corralation between SPASX Dividend and Auswide Bank
Assuming the 90 days trading horizon SPASX Dividend is expected to generate 10.78 times less return on investment than Auswide Bank. But when comparing it to its historical volatility, SPASX Dividend Opportunities is 2.94 times less risky than Auswide Bank. It trades about 0.05 of its potential returns per unit of risk. Auswide Bank is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 417.00 in Auswide Bank on August 29, 2024 and sell it today you would earn a total of 31.00 from holding Auswide Bank or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPASX Dividend Opportunities vs. Auswide Bank
Performance |
| Timeline |
SPASX Dividend and Auswide Bank Volatility Contrast
Predicted Return Density |
| Returns |
SPASX Dividend Opportunities
Pair trading matchups for SPASX Dividend
Auswide Bank
Pair trading matchups for Auswide Bank
Pair Trading with SPASX Dividend and Auswide Bank
The main advantage of trading using opposite SPASX Dividend and Auswide Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX Dividend position performs unexpectedly, Auswide Bank 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 Auswide Bank will offset losses from the drop in Auswide Bank's long position.| SPASX Dividend vs. Red Hill Iron | SPASX Dividend vs. Ainsworth Game Technology | SPASX Dividend vs. Champion Iron | SPASX Dividend vs. Autosports Group |
| Auswide Bank vs. Aneka Tambang Tbk | Auswide Bank vs. BHP Group Limited | Auswide Bank vs. Commonwealth Bank of | Auswide Bank vs. Commonwealth Bank of |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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