Correlation Between Bank of Queensland and Australia
Can any of the company-specific risk be diversified away by investing in both Bank of Queensland and Australia 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 Bank of Queensland and Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Queensland and Australia and New, you can compare the effects of market volatilities on Bank of Queensland and Australia 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 Bank of Queensland with a short position of Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Queensland and Australia.
Diversification Opportunities for Bank of Queensland and Australia
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Australia is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Queensland and Australia and New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australia and New and Bank of Queensland 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 Bank of Queensland are associated (or correlated) with Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australia and New has no effect on the direction of Bank of Queensland i.e., Bank of Queensland and Australia go up and down completely randomly.
Pair Corralation between Bank of Queensland and Australia
Assuming the 90 days trading horizon Bank of Queensland is expected to generate 1.42 times more return on investment than Australia. However, Bank of Queensland is 1.42 times more volatile than Australia and New. It trades about 0.08 of its potential returns per unit of risk. Australia and New is currently generating about -0.04 per unit of risk. If you would invest 10,380 in Bank of Queensland on October 24, 2024 and sell it today you would earn a total of 47.00 from holding Bank of Queensland or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Bank of Queensland vs. Australia and New
Performance |
| Timeline |
| Bank of Queensland |
| Australia and New |
Bank of Queensland and Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Queensland and Australia
The main advantage of trading using opposite Bank of Queensland and Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Queensland position performs unexpectedly, Australia 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 Australia will offset losses from the drop in Australia's long position.| Bank of Queensland vs. Hudson Investment Group | Bank of Queensland vs. Auswide Bank | Bank of Queensland vs. Clime Investment Management | Bank of Queensland vs. Wt Financial Group |
| Australia vs. Stelar Metals | Australia vs. M3 Mining | Australia vs. Centaurus Metals | Australia vs. Perseus Mining |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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