Correlation Between Chalice Mining and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Chalice Mining 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 Chalice Mining and Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chalice Mining Limited and Westpac Banking, you can compare the effects of market volatilities on Chalice Mining 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 Chalice Mining with a short position of Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chalice Mining and Westpac Banking.
Diversification Opportunities for Chalice Mining and Westpac Banking
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chalice and Westpac is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking and Chalice Mining 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 Chalice Mining Limited 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 Chalice Mining i.e., Chalice Mining and Westpac Banking go up and down completely randomly.
Pair Corralation between Chalice Mining and Westpac Banking
Assuming the 90 days trading horizon Chalice Mining Limited is expected to under-perform the Westpac Banking. In addition to that, Chalice Mining is 13.55 times more volatile than Westpac Banking. It trades about -0.05 of its total potential returns per unit of risk. Westpac Banking is currently generating about 0.1 per unit of volatility. If you would invest 9,654 in Westpac Banking on September 20, 2024 and sell it today you would earn a total of 833.00 from holding Westpac Banking or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Chalice Mining Limited vs. Westpac Banking
Performance |
| Timeline |
| Chalice Mining |
| Westpac Banking |
Chalice Mining and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chalice Mining and Westpac Banking
The main advantage of trading using opposite Chalice Mining and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chalice Mining 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.| Chalice Mining vs. Pinnacle Investment Management | Chalice Mining vs. Collins Foods | Chalice Mining vs. Bailador Technology Invest | Chalice Mining vs. Sandon Capital Investments |
| Westpac Banking vs. Westpac Banking | Westpac Banking vs. De Grey Mining | Westpac Banking vs. Pointsbet Holdings | Westpac Banking vs. Indiana Resources |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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