Correlation Between Challenger and Auctus Alternative
Can any of the company-specific risk be diversified away by investing in both Challenger and Auctus Alternative 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 Challenger and Auctus Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Challenger and Auctus Alternative Investments, you can compare the effects of market volatilities on Challenger and Auctus Alternative 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 Challenger with a short position of Auctus Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Challenger and Auctus Alternative.
Diversification Opportunities for Challenger and Auctus Alternative
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Challenger and Auctus is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Challenger and Auctus Alternative Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auctus Alternative and Challenger 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 Challenger are associated (or correlated) with Auctus Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auctus Alternative has no effect on the direction of Challenger i.e., Challenger and Auctus Alternative go up and down completely randomly.
Pair Corralation between Challenger and Auctus Alternative
Assuming the 90 days trading horizon Challenger is expected to generate 0.27 times more return on investment than Auctus Alternative. However, Challenger is 3.77 times less risky than Auctus Alternative. It trades about -0.02 of its potential returns per unit of risk. Auctus Alternative Investments is currently generating about -0.14 per unit of risk. If you would invest 604.00 in Challenger on October 15, 2024 and sell it today you would lose (3.00) from holding Challenger or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Challenger vs. Auctus Alternative Investments
Performance |
| Timeline |
| Challenger |
| Auctus Alternative |
Challenger and Auctus Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Challenger and Auctus Alternative
The main advantage of trading using opposite Challenger and Auctus Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Challenger position performs unexpectedly, Auctus Alternative 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 Auctus Alternative will offset losses from the drop in Auctus Alternative's long position.| Challenger vs. Charter Hall Retail | Challenger vs. Southern Cross Media | Challenger vs. Qbe Insurance Group | Challenger vs. Maggie Beer Holdings |
| Auctus Alternative vs. Sandon Capital Investments | Auctus Alternative vs. Carlton Investments | Auctus Alternative vs. Insurance Australia Group | Auctus Alternative vs. Neurotech International |
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.
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