Correlation Between Carlton Investments and National Australia
Can any of the company-specific risk be diversified away by investing in both Carlton Investments 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 Carlton Investments and National Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlton Investments and National Australia Bank, you can compare the effects of market volatilities on Carlton Investments 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 Carlton Investments with a short position of National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlton Investments and National Australia.
Diversification Opportunities for Carlton Investments and National Australia
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Carlton and National is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Carlton Investments 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 Carlton Investments 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 Carlton Investments 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 Carlton Investments i.e., Carlton Investments and National Australia go up and down completely randomly.
Pair Corralation between Carlton Investments and National Australia
Assuming the 90 days trading horizon Carlton Investments is expected to generate 1.85 times less return on investment than National Australia. In addition to that, Carlton Investments is 3.22 times more volatile than National Australia Bank. It trades about 0.01 of its total potential returns per unit of risk. National Australia Bank is currently generating about 0.07 per unit of volatility. If you would invest 9,527 in National Australia Bank on October 16, 2024 and sell it today you would earn a total of 890.00 from holding National Australia Bank or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlton Investments vs. National Australia Bank
Performance |
| Timeline |
| Carlton Investments |
| National Australia Bank |
Carlton Investments and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlton Investments and National Australia
The main advantage of trading using opposite Carlton Investments and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlton Investments 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.| Carlton Investments vs. Microequities Asset Management | Carlton Investments vs. A1 Investments Resources | Carlton Investments vs. MFF Capital Investments | Carlton Investments vs. Sandon Capital Investments |
| National Australia vs. Microequities Asset Management | National Australia vs. Aspire Mining | National Australia vs. Carlton Investments | National Australia vs. ABACUS STORAGE KING |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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