Correlation Between SPASX Dividend and Aristocrat Leisure
Can any of the company-specific risk be diversified away by investing in both SPASX Dividend and Aristocrat Leisure 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 Aristocrat Leisure 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 Aristocrat Leisure, you can compare the effects of market volatilities on SPASX Dividend and Aristocrat Leisure 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 Aristocrat Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX Dividend and Aristocrat Leisure.
Diversification Opportunities for SPASX Dividend and Aristocrat Leisure
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPASX and Aristocrat is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SPASX Dividend Opportunities and Aristocrat Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristocrat Leisure 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 Aristocrat Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristocrat Leisure has no effect on the direction of SPASX Dividend i.e., SPASX Dividend and Aristocrat Leisure go up and down completely randomly.
Pair Corralation between SPASX Dividend and Aristocrat Leisure
Assuming the 90 days trading horizon SPASX Dividend is expected to generate 4.15 times less return on investment than Aristocrat Leisure. But when comparing it to its historical volatility, SPASX Dividend Opportunities is 1.76 times less risky than Aristocrat Leisure. It trades about 0.18 of its potential returns per unit of risk. Aristocrat Leisure is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 6,114 in Aristocrat Leisure on September 1, 2024 and sell it today you would earn a total of 661.00 from holding Aristocrat Leisure or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPASX Dividend Opportunities vs. Aristocrat Leisure
Performance |
| Timeline |
SPASX Dividend and Aristocrat Leisure Volatility Contrast
Predicted Return Density |
| Returns |
SPASX Dividend Opportunities
Pair trading matchups for SPASX Dividend
Aristocrat Leisure
Pair trading matchups for Aristocrat Leisure
Pair Trading with SPASX Dividend and Aristocrat Leisure
The main advantage of trading using opposite SPASX Dividend and Aristocrat Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX Dividend position performs unexpectedly, Aristocrat Leisure 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 Aristocrat Leisure will offset losses from the drop in Aristocrat Leisure's long position.| SPASX Dividend vs. BKI Investment | SPASX Dividend vs. Diversified United Investment | SPASX Dividend vs. Ainsworth Game Technology | SPASX Dividend vs. Bio Gene Technology |
| Aristocrat Leisure vs. iShares Global Healthcare | Aristocrat Leisure vs. Australian Dairy Farms | Aristocrat Leisure vs. Adriatic Metals Plc | Aristocrat Leisure vs. Australian Agricultural |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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