Correlation Between SPDR SPASX and Australian Agricultural
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and Australian Agricultural 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 SPDR SPASX and Australian Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SPASX 200 and Australian Agricultural, you can compare the effects of market volatilities on SPDR SPASX and Australian Agricultural 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 SPDR SPASX with a short position of Australian Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and Australian Agricultural.
Diversification Opportunities for SPDR SPASX and Australian Agricultural
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPDR and Australian is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and Australian Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Agricultural and SPDR SPASX 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 SPDR SPASX 200 are associated (or correlated) with Australian Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Agricultural has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and Australian Agricultural go up and down completely randomly.
Pair Corralation between SPDR SPASX and Australian Agricultural
Assuming the 90 days trading horizon SPDR SPASX 200 is expected to generate 0.48 times more return on investment than Australian Agricultural. However, SPDR SPASX 200 is 2.08 times less risky than Australian Agricultural. It trades about 0.09 of its potential returns per unit of risk. Australian Agricultural is currently generating about 0.02 per unit of risk. If you would invest 2,368 in SPDR SPASX 200 on August 25, 2024 and sell it today you would earn a total of 325.00 from holding SPDR SPASX 200 or generate 13.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SPASX 200 vs. Australian Agricultural
Performance |
| Timeline |
| SPDR SPASX 200 |
| Australian Agricultural |
SPDR SPASX and Australian Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and Australian Agricultural
The main advantage of trading using opposite SPDR SPASX and Australian Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, Australian Agricultural 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 Australian Agricultural will offset losses from the drop in Australian Agricultural's long position.| SPDR SPASX vs. SPDR SPASX 200 | SPDR SPASX vs. SPDR SPASX 50 | SPDR SPASX vs. SPDR MSCI World | SPDR SPASX vs. SPDR Dow Jones |
| Australian Agricultural vs. Aneka Tambang Tbk | Australian Agricultural vs. BHP Group Limited | Australian Agricultural vs. Commonwealth Bank of | Australian Agricultural 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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