Correlation Between BSP Financial and Auswide Bank
Can any of the company-specific risk be diversified away by investing in both BSP Financial 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 BSP Financial and Auswide Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BSP Financial Group and Auswide Bank, you can compare the effects of market volatilities on BSP Financial 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 BSP Financial with a short position of Auswide Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Auswide Bank.
Diversification Opportunities for BSP Financial and Auswide Bank
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between BSP and Auswide is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Auswide Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auswide Bank and BSP Financial 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 BSP Financial Group 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 BSP Financial i.e., BSP Financial and Auswide Bank go up and down completely randomly.
Pair Corralation between BSP Financial and Auswide Bank
Assuming the 90 days trading horizon BSP Financial Group is expected to generate 1.29 times more return on investment than Auswide Bank. However, BSP Financial is 1.29 times more volatile than Auswide Bank. It trades about 0.07 of its potential returns per unit of risk. Auswide Bank is currently generating about 0.0 per unit of risk. If you would invest 486.00 in BSP Financial Group on August 29, 2024 and sell it today you would earn a total of 164.00 from holding BSP Financial Group or generate 33.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSP Financial Group vs. Auswide Bank
Performance |
| Timeline |
| BSP Financial Group |
| Auswide Bank |
BSP Financial and Auswide Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Auswide Bank
The main advantage of trading using opposite BSP Financial and Auswide Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial 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.| BSP Financial vs. Champion Iron | BSP Financial vs. Ridley | BSP Financial vs. Peel Mining | BSP Financial vs. Australian Dairy Farms |
| Auswide Bank vs. Champion Iron | Auswide Bank vs. Ridley | Auswide Bank vs. Peel Mining | Auswide Bank vs. Australian Dairy Farms |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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