Correlation Between Finexia Financial and ANZ Group
Can any of the company-specific risk be diversified away by investing in both Finexia Financial and ANZ Group 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 Finexia Financial and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finexia Financial Group and ANZ Group Holdings, you can compare the effects of market volatilities on Finexia Financial and ANZ Group 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 Finexia Financial with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and ANZ Group.
Diversification Opportunities for Finexia Financial and ANZ Group
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finexia and ANZ is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and Finexia Financial 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 Finexia Financial Group are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Finexia Financial i.e., Finexia Financial and ANZ Group go up and down completely randomly.
Pair Corralation between Finexia Financial and ANZ Group
Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 11.19 times more return on investment than ANZ Group. However, Finexia Financial is 11.19 times more volatile than ANZ Group Holdings. It trades about 0.05 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about 0.06 per unit of risk. If you would invest 20.00 in Finexia Financial Group on September 4, 2024 and sell it today you would earn a total of 10.00 from holding Finexia Financial Group or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finexia Financial Group vs. ANZ Group Holdings
Performance |
| Timeline |
| Finexia Financial |
| ANZ Group Holdings |
Finexia Financial and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and ANZ Group
The main advantage of trading using opposite Finexia Financial and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.| Finexia Financial vs. Audio Pixels Holdings | Finexia Financial vs. Iodm | Finexia Financial vs. Nsx | Finexia Financial vs. TTG Fintech |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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