Correlation Between British Amer and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both British Amer and Westpac Banking 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 Westpac Banking 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 Westpac Banking, you can compare the effects of market volatilities on British Amer and Westpac Banking 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 Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Westpac Banking.
Diversification Opportunities for British Amer and Westpac Banking
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between British and Westpac is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking 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 Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of British Amer i.e., British Amer and Westpac Banking go up and down completely randomly.
Pair Corralation between British Amer and Westpac Banking
Assuming the 90 days trading horizon Bailador Technology Invest is expected to generate 1.94 times more return on investment than Westpac Banking. However, British Amer is 1.94 times more volatile than Westpac Banking. It trades about 0.0 of its potential returns per unit of risk. Westpac Banking is currently generating about 0.0 per unit of risk. If you would invest 126.00 in Bailador Technology Invest on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Bailador Technology Invest or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. Westpac Banking
Performance |
| Timeline |
| Bailador Technology |
| Westpac Banking |
British Amer and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Westpac Banking
The main advantage of trading using opposite British Amer and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| British Amer vs. WA1 Resources | British Amer vs. Predictive Discovery | British Amer vs. Cooper Metals | British Amer vs. OD6 Metals |
| Westpac Banking vs. Imricor Medical Systems | Westpac Banking vs. Midway | Westpac Banking vs. Betmakers Technology Group | Westpac Banking vs. SportsHero |
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
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |