Correlation Between Elixinol Global and Australis Capital
Can any of the company-specific risk be diversified away by investing in both Elixinol Global and Australis Capital 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 Elixinol Global and Australis Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elixinol Global and Australis Capital, you can compare the effects of market volatilities on Elixinol Global and Australis Capital 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 Elixinol Global with a short position of Australis Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elixinol Global and Australis Capital.
Diversification Opportunities for Elixinol Global and Australis Capital
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elixinol and Australis is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Elixinol Global and Australis Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australis Capital and Elixinol Global 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 Elixinol Global are associated (or correlated) with Australis Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australis Capital has no effect on the direction of Elixinol Global i.e., Elixinol Global and Australis Capital go up and down completely randomly.
Pair Corralation between Elixinol Global and Australis Capital
Assuming the 90 days horizon Elixinol Global is expected to generate 0.99 times more return on investment than Australis Capital. However, Elixinol Global is 1.01 times less risky than Australis Capital. It trades about 0.17 of its potential returns per unit of risk. Australis Capital is currently generating about 0.12 per unit of risk. If you would invest 0.22 in Elixinol Global on September 12, 2024 and sell it today you would earn a total of 0.28 from holding Elixinol Global or generate 127.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elixinol Global vs. Australis Capital
Performance |
| Timeline |
| Elixinol Global |
| Australis Capital |
Elixinol Global and Australis Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elixinol Global and Australis Capital
The main advantage of trading using opposite Elixinol Global and Australis Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elixinol Global position performs unexpectedly, Australis Capital 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 Australis Capital will offset losses from the drop in Australis Capital's long position.| Elixinol Global vs. Pharmadrug | Elixinol Global vs. Livewire Ergogenics | Elixinol Global vs. Agra Ventures | Elixinol Global vs. BellRock Brands |
| Australis Capital vs. Body and Mind | Australis Capital vs. Radient Technologies | Australis Capital vs. Choom Holdings | Australis Capital vs. Khiron Life Sciences |
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.
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