Correlation Between Credit Clear and National Australia
Can any of the company-specific risk be diversified away by investing in both Credit Clear and National 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 Credit Clear and National Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Clear and National Australia Bank, you can compare the effects of market volatilities on Credit Clear and National 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 Credit Clear with a short position of National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Clear and National Australia.
Diversification Opportunities for Credit Clear and National Australia
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Credit and National is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Credit Clear and National Australia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Australia Bank and Credit Clear 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 Credit Clear are associated (or correlated) with National Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Australia Bank has no effect on the direction of Credit Clear i.e., Credit Clear and National Australia go up and down completely randomly.
Pair Corralation between Credit Clear and National Australia
Assuming the 90 days trading horizon Credit Clear is expected to generate 16.95 times more return on investment than National Australia. However, Credit Clear is 16.95 times more volatile than National Australia Bank. It trades about 0.08 of its potential returns per unit of risk. National Australia Bank is currently generating about 0.06 per unit of risk. If you would invest 19.00 in Credit Clear on September 4, 2024 and sell it today you would earn a total of 16.00 from holding Credit Clear or generate 84.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Credit Clear vs. National Australia Bank
Performance |
| Timeline |
| Credit Clear |
| National Australia Bank |
Credit Clear and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Clear and National Australia
The main advantage of trading using opposite Credit Clear and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Clear position performs unexpectedly, National 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 National Australia will offset losses from the drop in National Australia's long position.| Credit Clear vs. Aneka Tambang Tbk | Credit Clear vs. Commonwealth Bank of | Credit Clear vs. Australia and New | Credit Clear vs. ANZ Group Holdings |
| National Australia vs. MetalsGrove Mining | National Australia vs. Pioneer Credit | National Australia vs. Credit Clear | National Australia vs. Computershare |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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