Correlation Between Boliden AB and Australian Strategic
Can any of the company-specific risk be diversified away by investing in both Boliden AB and Australian Strategic 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 Boliden AB and Australian Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boliden AB and Australian Strategic Materials, you can compare the effects of market volatilities on Boliden AB and Australian Strategic 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 Boliden AB with a short position of Australian Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boliden AB and Australian Strategic.
Diversification Opportunities for Boliden AB and Australian Strategic
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boliden and Australian is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Boliden AB and Australian Strategic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Strategic and Boliden AB 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 Boliden AB are associated (or correlated) with Australian Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Strategic has no effect on the direction of Boliden AB i.e., Boliden AB and Australian Strategic go up and down completely randomly.
Pair Corralation between Boliden AB and Australian Strategic
If you would invest 3,465 in Boliden AB on September 20, 2024 and sell it today you would earn a total of 0.00 from holding Boliden AB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Boliden AB vs. Australian Strategic Materials
Performance |
| Timeline |
| Boliden AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Australian Strategic |
Boliden AB and Australian Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boliden AB and Australian Strategic
The main advantage of trading using opposite Boliden AB and Australian Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boliden AB position performs unexpectedly, Australian Strategic 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 Australian Strategic will offset losses from the drop in Australian Strategic's long position.| Boliden AB vs. Avarone Metals | Boliden AB vs. Aurelia Metals Limited | Boliden AB vs. Adriatic Metals PLC | Boliden AB vs. Huntsman Exploration |
| Australian Strategic vs. IGO Limited | Australian Strategic vs. Focus Graphite | Australian Strategic vs. Anson Resources Limited | Australian Strategic vs. Avarone Metals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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