Correlation Between Champion Iron and Vicinity Centres
Can any of the company-specific risk be diversified away by investing in both Champion Iron and Vicinity Centres 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 Champion Iron and Vicinity Centres into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and Vicinity Centres Re, you can compare the effects of market volatilities on Champion Iron and Vicinity Centres 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 Champion Iron with a short position of Vicinity Centres. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and Vicinity Centres.
Diversification Opportunities for Champion Iron and Vicinity Centres
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Champion and Vicinity is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and Vicinity Centres Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicinity Centres and Champion Iron 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 Champion Iron are associated (or correlated) with Vicinity Centres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicinity Centres has no effect on the direction of Champion Iron i.e., Champion Iron and Vicinity Centres go up and down completely randomly.
Pair Corralation between Champion Iron and Vicinity Centres
Assuming the 90 days trading horizon Champion Iron is expected to under-perform the Vicinity Centres. In addition to that, Champion Iron is 1.91 times more volatile than Vicinity Centres Re. It trades about -0.03 of its total potential returns per unit of risk. Vicinity Centres Re is currently generating about 0.08 per unit of volatility. If you would invest 186.00 in Vicinity Centres Re on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Vicinity Centres Re or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Iron vs. Vicinity Centres Re
Performance |
| Timeline |
| Champion Iron |
| Vicinity Centres |
Champion Iron and Vicinity Centres Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and Vicinity Centres
The main advantage of trading using opposite Champion Iron and Vicinity Centres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron position performs unexpectedly, Vicinity Centres 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 Vicinity Centres will offset losses from the drop in Vicinity Centres' long position.| Champion Iron vs. Northern Star Resources | Champion Iron vs. Evolution Mining | Champion Iron vs. Bluescope Steel | Champion Iron vs. Aneka Tambang Tbk |
| Vicinity Centres vs. Charter Hall Retail | Vicinity Centres vs. GDI Property Group | Vicinity Centres vs. Champion Iron | Vicinity Centres vs. iShares Global Healthcare |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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