Correlation Between Ecofibre and Ampol
Can any of the company-specific risk be diversified away by investing in both Ecofibre and Ampol 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 Ecofibre and Ampol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofibre and Ampol, you can compare the effects of market volatilities on Ecofibre and Ampol 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 Ecofibre with a short position of Ampol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofibre and Ampol.
Diversification Opportunities for Ecofibre and Ampol
Very good diversification
The 3 months correlation between Ecofibre and Ampol is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ecofibre and Ampol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampol and Ecofibre 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 Ecofibre are associated (or correlated) with Ampol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampol has no effect on the direction of Ecofibre i.e., Ecofibre and Ampol go up and down completely randomly.
Pair Corralation between Ecofibre and Ampol
Assuming the 90 days trading horizon Ecofibre is expected to under-perform the Ampol. In addition to that, Ecofibre is 2.23 times more volatile than Ampol. It trades about -0.25 of its total potential returns per unit of risk. Ampol is currently generating about 0.14 per unit of volatility. If you would invest 2,820 in Ampol on August 31, 2024 and sell it today you would earn a total of 134.00 from holding Ampol or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ecofibre vs. Ampol
Performance |
| Timeline |
| Ecofibre |
| Ampol |
Ecofibre and Ampol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofibre and Ampol
The main advantage of trading using opposite Ecofibre and Ampol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofibre position performs unexpectedly, Ampol 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 Ampol will offset losses from the drop in Ampol's long position.| Ecofibre vs. Aussie Broadband | Ecofibre vs. Kneomedia | Ecofibre vs. Queste Communications | Ecofibre vs. AiMedia Technologies |
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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