Correlation Between Centrex Metals and Auswide Bank
Can any of the company-specific risk be diversified away by investing in both Centrex Metals and Auswide Bank 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 Centrex Metals and Auswide Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrex Metals and Auswide Bank, you can compare the effects of market volatilities on Centrex Metals and Auswide Bank 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 Centrex Metals with a short position of Auswide Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrex Metals and Auswide Bank.
Diversification Opportunities for Centrex Metals and Auswide Bank
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Centrex and Auswide is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Centrex Metals and Auswide Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auswide Bank and Centrex Metals 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 Centrex Metals are associated (or correlated) with Auswide Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auswide Bank has no effect on the direction of Centrex Metals i.e., Centrex Metals and Auswide Bank go up and down completely randomly.
Pair Corralation between Centrex Metals and Auswide Bank
Assuming the 90 days trading horizon Centrex Metals is expected to under-perform the Auswide Bank. In addition to that, Centrex Metals is 3.58 times more volatile than Auswide Bank. It trades about -0.06 of its total potential returns per unit of risk. Auswide Bank is currently generating about 0.0 per unit of volatility. If you would invest 516.00 in Auswide Bank on October 13, 2024 and sell it today you would lose (39.00) from holding Auswide Bank or give up 7.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrex Metals vs. Auswide Bank
Performance |
| Timeline |
| Centrex Metals |
| Auswide Bank |
Centrex Metals and Auswide Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrex Metals and Auswide Bank
The main advantage of trading using opposite Centrex Metals and Auswide Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrex Metals position performs unexpectedly, Auswide Bank 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 Auswide Bank will offset losses from the drop in Auswide Bank's long position.| Centrex Metals vs. Readytech Holdings | Centrex Metals vs. Kneomedia | Centrex Metals vs. Genetic Technologies | Centrex Metals vs. Retail Food Group |
| Auswide Bank vs. Centrex Metals | Auswide Bank vs. Macquarie Technology Group | Auswide Bank vs. Aeon Metals | Auswide Bank vs. Group 6 Metals |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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