Correlation Between SPASX Dividend and Southern Hemisphere
Can any of the company-specific risk be diversified away by investing in both SPASX Dividend and Southern Hemisphere 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 Southern Hemisphere 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 Southern Hemisphere Mining, you can compare the effects of market volatilities on SPASX Dividend and Southern Hemisphere 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 Southern Hemisphere. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX Dividend and Southern Hemisphere.
Diversification Opportunities for SPASX Dividend and Southern Hemisphere
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPASX and Southern is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SPASX Dividend Opportunities and Southern Hemisphere Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Hemisphere 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 Southern Hemisphere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Hemisphere has no effect on the direction of SPASX Dividend i.e., SPASX Dividend and Southern Hemisphere go up and down completely randomly.
Pair Corralation between SPASX Dividend and Southern Hemisphere
Assuming the 90 days trading horizon SPASX Dividend is expected to generate 5.09 times less return on investment than Southern Hemisphere. But when comparing it to its historical volatility, SPASX Dividend Opportunities is 10.18 times less risky than Southern Hemisphere. It trades about 0.19 of its potential returns per unit of risk. Southern Hemisphere Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3.10 in Southern Hemisphere Mining on November 8, 2024 and sell it today you would earn a total of 0.30 from holding Southern Hemisphere Mining or generate 9.68% 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. Southern Hemisphere Mining
Performance |
| Timeline |
SPASX Dividend and Southern Hemisphere Volatility Contrast
Predicted Return Density |
| Returns |
SPASX Dividend Opportunities
Pair trading matchups for SPASX Dividend
Southern Hemisphere Mining
Pair trading matchups for Southern Hemisphere
Pair Trading with SPASX Dividend and Southern Hemisphere
The main advantage of trading using opposite SPASX Dividend and Southern Hemisphere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX Dividend position performs unexpectedly, Southern Hemisphere 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 Southern Hemisphere will offset losses from the drop in Southern Hemisphere's long position.| SPASX Dividend vs. Hutchison Telecommunications | SPASX Dividend vs. National Australia Bank | SPASX Dividend vs. Westpac Banking | SPASX Dividend vs. Prime Financial Group |
| Southern Hemisphere vs. Argo Investments | Southern Hemisphere vs. Navigator Global Investments | Southern Hemisphere vs. Hudson Investment Group | Southern Hemisphere vs. Hutchison Telecommunications |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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