Correlation Between British Amer and Austco Healthcare
Can any of the company-specific risk be diversified away by investing in both British Amer and Austco Healthcare 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 British Amer and Austco Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bailador Technology Invest and Austco Healthcare, you can compare the effects of market volatilities on British Amer and Austco Healthcare 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 British Amer with a short position of Austco Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Austco Healthcare.
Diversification Opportunities for British Amer and Austco Healthcare
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between British and Austco is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Austco Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austco Healthcare and British Amer 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 Bailador Technology Invest are associated (or correlated) with Austco Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austco Healthcare has no effect on the direction of British Amer i.e., British Amer and Austco Healthcare go up and down completely randomly.
Pair Corralation between British Amer and Austco Healthcare
Assuming the 90 days trading horizon British Amer is expected to generate 2.88 times less return on investment than Austco Healthcare. But when comparing it to its historical volatility, Bailador Technology Invest is 2.63 times less risky than Austco Healthcare. It trades about 0.06 of its potential returns per unit of risk. Austco Healthcare is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Austco Healthcare on August 25, 2024 and sell it today you would earn a total of 4.00 from holding Austco Healthcare or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Bailador Technology Invest vs. Austco Healthcare
Performance |
| Timeline |
| Bailador Technology |
| Austco Healthcare |
British Amer and Austco Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Austco Healthcare
The main advantage of trading using opposite British Amer and Austco Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Austco Healthcare 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 Austco Healthcare will offset losses from the drop in Austco Healthcare's long position.| British Amer vs. National Australia Bank | British Amer vs. National Australia Bank | British Amer vs. Westpac Banking | British Amer vs. National Australia Bank |
| Austco Healthcare vs. FSA Group | Austco Healthcare vs. Tamawood | Austco Healthcare vs. Cochlear | Austco Healthcare vs. Rea Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |