Correlation Between Finexia Financial and Bank of Queensland
Can any of the company-specific risk be diversified away by investing in both Finexia Financial and Bank of Queensland 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 Bank of Queensland 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 Bank of Queensland, you can compare the effects of market volatilities on Finexia Financial and Bank of Queensland 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 Bank of Queensland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Bank of Queensland.
Diversification Opportunities for Finexia Financial and Bank of Queensland
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finexia and Bank is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Bank of Queensland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Queensland 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 Bank of Queensland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Queensland has no effect on the direction of Finexia Financial i.e., Finexia Financial and Bank of Queensland go up and down completely randomly.
Pair Corralation between Finexia Financial and Bank of Queensland
Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 12.47 times more return on investment than Bank of Queensland. However, Finexia Financial is 12.47 times more volatile than Bank of Queensland. It trades about 0.03 of its potential returns per unit of risk. Bank of Queensland is currently generating about 0.09 per unit of risk. If you would invest 26.00 in Finexia Financial Group on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Finexia Financial Group or generate 23.08% 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. Bank of Queensland
Performance |
| Timeline |
| Finexia Financial |
| Bank of Queensland |
Finexia Financial and Bank of Queensland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and Bank of Queensland
The main advantage of trading using opposite Finexia Financial and Bank of Queensland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial position performs unexpectedly, Bank of Queensland 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 Bank of Queensland will offset losses from the drop in Bank of Queensland's long position.| Finexia Financial vs. Ragnar Metals | Finexia Financial vs. Macquarie Bank Limited | Finexia Financial vs. American West Metals | Finexia Financial vs. Perpetual Credit Income |
| Bank of Queensland vs. Imricor Medical Systems | Bank of Queensland vs. Midway | Bank of Queensland vs. Aristocrat Leisure | Bank of Queensland vs. iShares Global Healthcare |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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