Correlation Between FleetPartners and Iluka Resources
Can any of the company-specific risk be diversified away by investing in both FleetPartners and Iluka Resources 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 FleetPartners and Iluka Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FleetPartners Group and Iluka Resources, you can compare the effects of market volatilities on FleetPartners and Iluka Resources 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 FleetPartners with a short position of Iluka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of FleetPartners and Iluka Resources.
Diversification Opportunities for FleetPartners and Iluka Resources
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between FleetPartners and Iluka is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding FleetPartners Group and Iluka Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iluka Resources and FleetPartners 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 FleetPartners Group are associated (or correlated) with Iluka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iluka Resources has no effect on the direction of FleetPartners i.e., FleetPartners and Iluka Resources go up and down completely randomly.
Pair Corralation between FleetPartners and Iluka Resources
Assuming the 90 days trading horizon FleetPartners Group is expected to generate 1.03 times more return on investment than Iluka Resources. However, FleetPartners is 1.03 times more volatile than Iluka Resources. It trades about 0.08 of its potential returns per unit of risk. Iluka Resources is currently generating about -0.15 per unit of risk. If you would invest 304.00 in FleetPartners Group on August 30, 2024 and sell it today you would earn a total of 11.00 from holding FleetPartners Group or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FleetPartners Group vs. Iluka Resources
Performance |
| Timeline |
| FleetPartners Group |
| Iluka Resources |
FleetPartners and Iluka Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FleetPartners and Iluka Resources
The main advantage of trading using opposite FleetPartners and Iluka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FleetPartners position performs unexpectedly, Iluka Resources 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 Iluka Resources will offset losses from the drop in Iluka Resources' long position.| FleetPartners vs. Lendlease Group | FleetPartners vs. Kneomedia | FleetPartners vs. Australian Unity Office | FleetPartners vs. Bio Gene Technology |
| Iluka Resources vs. Dexus Convenience Retail | Iluka Resources vs. Clime Investment Management | Iluka Resources vs. Embark Education Group | Iluka Resources vs. Bailador Technology Invest |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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