Correlation Between A1 Investments and Woolworths
Can any of the company-specific risk be diversified away by investing in both A1 Investments and Woolworths 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 A1 Investments and Woolworths into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A1 Investments Resources and Woolworths, you can compare the effects of market volatilities on A1 Investments and Woolworths 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 A1 Investments with a short position of Woolworths. Check out your portfolio center. Please also check ongoing floating volatility patterns of A1 Investments and Woolworths.
Diversification Opportunities for A1 Investments and Woolworths
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AYI and Woolworths is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding A1 Investments Resources and Woolworths in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woolworths and A1 Investments 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 A1 Investments Resources are associated (or correlated) with Woolworths. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woolworths has no effect on the direction of A1 Investments i.e., A1 Investments and Woolworths go up and down completely randomly.
Pair Corralation between A1 Investments and Woolworths
If you would invest (100.00) in Woolworths on October 26, 2024 and sell it today you would earn a total of 100.00 from holding Woolworths or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
A1 Investments Resources vs. Woolworths
Performance |
| Timeline |
| A1 Investments Resources |
| Woolworths |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
A1 Investments and Woolworths Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A1 Investments and Woolworths
The main advantage of trading using opposite A1 Investments and Woolworths positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A1 Investments position performs unexpectedly, Woolworths 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 Woolworths will offset losses from the drop in Woolworths' long position.| A1 Investments vs. Perseus Mining | A1 Investments vs. Truscott Mining Corp | A1 Investments vs. Beston Global Food | A1 Investments vs. 29Metals |
| Woolworths vs. Ambertech | Woolworths vs. Neurotech International | Woolworths vs. Macquarie Technology Group | Woolworths vs. Dexus Convenience Retail |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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