Correlation Between Bank of Queensland and Genetic Technologies
Can any of the company-specific risk be diversified away by investing in both Bank of Queensland and Genetic Technologies 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 Genetic Technologies 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 Genetic Technologies, you can compare the effects of market volatilities on Bank of Queensland and Genetic Technologies 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 Genetic Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Queensland and Genetic Technologies.
Diversification Opportunities for Bank of Queensland and Genetic Technologies
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Genetic is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Queensland and Genetic Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetic Technologies 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 Genetic Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetic Technologies has no effect on the direction of Bank of Queensland i.e., Bank of Queensland and Genetic Technologies go up and down completely randomly.
Pair Corralation between Bank of Queensland and Genetic Technologies
Assuming the 90 days trading horizon Bank of Queensland is expected to generate 476.8 times less return on investment than Genetic Technologies. But when comparing it to its historical volatility, Bank of Queensland is 342.7 times less risky than Genetic Technologies. It trades about 0.09 of its potential returns per unit of risk. Genetic Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Genetic Technologies on August 26, 2024 and sell it today you would lose (15.10) from holding Genetic Technologies or give up 79.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.22% |
| Values | Daily Returns |
Bank of Queensland vs. Genetic Technologies
Performance |
| Timeline |
| Bank of Queensland |
| Genetic Technologies |
Bank of Queensland and Genetic Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Queensland and Genetic Technologies
The main advantage of trading using opposite Bank of Queensland and Genetic Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Queensland position performs unexpectedly, Genetic Technologies 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 Genetic Technologies will offset losses from the drop in Genetic Technologies' long position.| Bank of Queensland vs. Mystate | Bank of Queensland vs. Insurance Australia Group | Bank of Queensland vs. Origin Energy | Bank of Queensland vs. Ecofibre |
| Genetic Technologies vs. Aneka Tambang Tbk | Genetic Technologies vs. National Australia Bank | Genetic Technologies vs. Commonwealth Bank of | Genetic Technologies vs. Commonwealth Bank of |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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