Correlation Between Bank of Queensland and Environmental
Can any of the company-specific risk be diversified away by investing in both Bank of Queensland and Environmental 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 Environmental 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 The Environmental Group, you can compare the effects of market volatilities on Bank of Queensland and Environmental 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 Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Queensland and Environmental.
Diversification Opportunities for Bank of Queensland and Environmental
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Environmental is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Queensland and The Environmental Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Environmental 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 Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Environmental has no effect on the direction of Bank of Queensland i.e., Bank of Queensland and Environmental go up and down completely randomly.
Pair Corralation between Bank of Queensland and Environmental
Assuming the 90 days trading horizon Bank of Queensland is expected to generate 0.09 times more return on investment than Environmental. However, Bank of Queensland is 11.22 times less risky than Environmental. It trades about 0.06 of its potential returns per unit of risk. The Environmental Group is currently generating about -0.15 per unit of risk. If you would invest 10,365 in Bank of Queensland on November 1, 2024 and sell it today you would earn a total of 105.00 from holding Bank of Queensland or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.36% |
| Values | Daily Returns |
Bank of Queensland vs. The Environmental Group
Performance |
| Timeline |
| Bank of Queensland |
| The Environmental |
Bank of Queensland and Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Queensland and Environmental
The main advantage of trading using opposite Bank of Queensland and Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Queensland position performs unexpectedly, Environmental 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 Environmental will offset losses from the drop in Environmental's long position.| Bank of Queensland vs. Super Retail Group | Bank of Queensland vs. Lykos Metals | Bank of Queensland vs. Cleanaway Waste Management | Bank of Queensland vs. Insurance Australia Group |
| Environmental vs. Centaurus Metals | Environmental vs. Aeon Metals | Environmental vs. Stelar Metals | Environmental vs. MetalsGrove 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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