Correlation Between SPASX Dividend and Latitude Financial
Can any of the company-specific risk be diversified away by investing in both SPASX Dividend and Latitude Financial 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 Latitude Financial 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 Latitude Financial Services, you can compare the effects of market volatilities on SPASX Dividend and Latitude Financial 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 Latitude Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX Dividend and Latitude Financial.
Diversification Opportunities for SPASX Dividend and Latitude Financial
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPASX and Latitude is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding SPASX Dividend Opportunities and Latitude Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latitude Financial 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 Latitude Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latitude Financial has no effect on the direction of SPASX Dividend i.e., SPASX Dividend and Latitude Financial go up and down completely randomly.
Pair Corralation between SPASX Dividend and Latitude Financial
Assuming the 90 days trading horizon SPASX Dividend Opportunities is expected to generate 0.62 times more return on investment than Latitude Financial. However, SPASX Dividend Opportunities is 1.62 times less risky than Latitude Financial. It trades about 0.03 of its potential returns per unit of risk. Latitude Financial Services is currently generating about -0.01 per unit of risk. If you would invest 154,380 in SPASX Dividend Opportunities on August 30, 2024 and sell it today you would earn a total of 15,260 from holding SPASX Dividend Opportunities or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SPASX Dividend Opportunities vs. Latitude Financial Services
Performance |
| Timeline |
SPASX Dividend and Latitude Financial Volatility Contrast
Predicted Return Density |
| Returns |
SPASX Dividend Opportunities
Pair trading matchups for SPASX Dividend
Latitude Financial Services
Pair trading matchups for Latitude Financial
Pair Trading with SPASX Dividend and Latitude Financial
The main advantage of trading using opposite SPASX Dividend and Latitude Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX Dividend position performs unexpectedly, Latitude Financial 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 Latitude Financial will offset losses from the drop in Latitude Financial's long position.| SPASX Dividend vs. The Environmental Group | SPASX Dividend vs. DY6 Metals | SPASX Dividend vs. Tombador Iron | SPASX Dividend vs. American West Metals |
| Latitude Financial vs. Treasury Wine Estates | Latitude Financial vs. BKI Investment | Latitude Financial vs. Australian United Investment | Latitude Financial vs. Nine Entertainment Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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