Correlation Between Catalyst Metals and Auswide Bank
Can any of the company-specific risk be diversified away by investing in both Catalyst 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 Catalyst 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 Catalyst Metals and Auswide Bank, you can compare the effects of market volatilities on Catalyst 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 Catalyst Metals with a short position of Auswide Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Metals and Auswide Bank.
Diversification Opportunities for Catalyst Metals and Auswide Bank
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Catalyst and Auswide is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Metals and Auswide Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auswide Bank and Catalyst 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 Catalyst 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 Catalyst Metals i.e., Catalyst Metals and Auswide Bank go up and down completely randomly.
Pair Corralation between Catalyst Metals and Auswide Bank
Assuming the 90 days trading horizon Catalyst Metals is expected to under-perform the Auswide Bank. In addition to that, Catalyst Metals is 3.0 times more volatile than Auswide Bank. It trades about -0.01 of its total potential returns per unit of risk. Auswide Bank is currently generating about 0.14 per unit of volatility. If you would invest 417.00 in Auswide Bank on August 27, 2024 and sell it today you would earn a total of 23.00 from holding Auswide Bank or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Metals vs. Auswide Bank
Performance |
| Timeline |
| Catalyst Metals |
| Auswide Bank |
Catalyst Metals and Auswide Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Metals and Auswide Bank
The main advantage of trading using opposite Catalyst Metals and Auswide Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst 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.| Catalyst Metals vs. TPG Telecom | Catalyst Metals vs. Queste Communications | Catalyst Metals vs. Treasury Wine Estates | Catalyst Metals vs. Stelar Metals |
| Auswide Bank vs. Aneka Tambang Tbk | Auswide Bank vs. BHP Group Limited | Auswide Bank vs. Commonwealth Bank of | Auswide Bank vs. Commonwealth Bank of |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |