Correlation Between Fisher Paykel and National Australia
Can any of the company-specific risk be diversified away by investing in both Fisher Paykel and National Australia 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 Fisher Paykel and National Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fisher Paykel Healthcare and National Australia Bank, you can compare the effects of market volatilities on Fisher Paykel and National Australia 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 Fisher Paykel with a short position of National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Paykel and National Australia.
Diversification Opportunities for Fisher Paykel and National Australia
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fisher and National is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Paykel Healthcare and National Australia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Australia Bank and Fisher Paykel 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 Fisher Paykel Healthcare are associated (or correlated) with National Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Australia Bank has no effect on the direction of Fisher Paykel i.e., Fisher Paykel and National Australia go up and down completely randomly.
Pair Corralation between Fisher Paykel and National Australia
Assuming the 90 days trading horizon Fisher Paykel Healthcare is expected to under-perform the National Australia. In addition to that, Fisher Paykel is 6.27 times more volatile than National Australia Bank. It trades about -0.02 of its total potential returns per unit of risk. National Australia Bank is currently generating about 0.05 per unit of volatility. If you would invest 10,331 in National Australia Bank on September 15, 2024 and sell it today you would earn a total of 29.00 from holding National Australia Bank or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fisher Paykel Healthcare vs. National Australia Bank
Performance |
| Timeline |
| Fisher Paykel Healthcare |
| National Australia Bank |
Fisher Paykel and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Paykel and National Australia
The main advantage of trading using opposite Fisher Paykel and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Paykel position performs unexpectedly, National Australia 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 National Australia will offset losses from the drop in National Australia's long position.| Fisher Paykel vs. Prime Financial Group | Fisher Paykel vs. Auswide Bank | Fisher Paykel vs. Centaurus Metals | Fisher Paykel vs. Alto Metals |
| National Australia vs. Nine Entertainment Co | National Australia vs. Fisher Paykel Healthcare | National Australia vs. Ras Technology Holdings | National Australia vs. Computershare |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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