Correlation Between Garda Diversified and ARN Media
Can any of the company-specific risk be diversified away by investing in both Garda Diversified and ARN Media 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 Garda Diversified and ARN Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garda Diversified Ppty and ARN Media Limited, you can compare the effects of market volatilities on Garda Diversified and ARN Media 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 Garda Diversified with a short position of ARN Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Diversified and ARN Media.
Diversification Opportunities for Garda Diversified and ARN Media
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Garda and ARN is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Garda Diversified Ppty and ARN Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARN Media Limited and Garda Diversified 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 Garda Diversified Ppty are associated (or correlated) with ARN Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARN Media Limited has no effect on the direction of Garda Diversified i.e., Garda Diversified and ARN Media go up and down completely randomly.
Pair Corralation between Garda Diversified and ARN Media
Assuming the 90 days trading horizon Garda Diversified is expected to generate 1.9 times less return on investment than ARN Media. But when comparing it to its historical volatility, Garda Diversified Ppty is 2.13 times less risky than ARN Media. It trades about 0.06 of its potential returns per unit of risk. ARN Media Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 59.00 in ARN Media Limited on November 2, 2024 and sell it today you would earn a total of 7.00 from holding ARN Media Limited or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garda Diversified Ppty vs. ARN Media Limited
Performance |
| Timeline |
| Garda Diversified Ppty |
| ARN Media Limited |
Garda Diversified and ARN Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garda Diversified and ARN Media
The main advantage of trading using opposite Garda Diversified and ARN Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Diversified position performs unexpectedly, ARN Media 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 ARN Media will offset losses from the drop in ARN Media's long position.| Garda Diversified vs. Saferoads Holdings | Garda Diversified vs. G8 Education | Garda Diversified vs. Djerriwarrh Investments | Garda Diversified vs. Insurance Australia Group |
| ARN Media vs. Austco Healthcare | ARN Media vs. Aeris Environmental | ARN Media vs. Australian Strategic Materials | ARN Media vs. Regal Funds Management |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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