Correlation Between Garda Diversified and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Garda Diversified and Westpac Banking 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 Westpac Banking 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 Westpac Banking, you can compare the effects of market volatilities on Garda Diversified and Westpac Banking 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 Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Diversified and Westpac Banking.
Diversification Opportunities for Garda Diversified and Westpac Banking
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Garda and Westpac is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Garda Diversified Ppty and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking 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 Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Garda Diversified i.e., Garda Diversified and Westpac Banking go up and down completely randomly.
Pair Corralation between Garda Diversified and Westpac Banking
Assuming the 90 days trading horizon Garda Diversified is expected to generate 2.42 times less return on investment than Westpac Banking. In addition to that, Garda Diversified is 4.56 times more volatile than Westpac Banking. It trades about 0.01 of its total potential returns per unit of risk. Westpac Banking is currently generating about 0.1 per unit of volatility. If you would invest 9,775 in Westpac Banking on September 12, 2024 and sell it today you would earn a total of 777.00 from holding Westpac Banking or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 49.0% |
| Values | Daily Returns |
Garda Diversified Ppty vs. Westpac Banking
Performance |
| Timeline |
| Garda Diversified Ppty |
| Westpac Banking |
Garda Diversified and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garda Diversified and Westpac Banking
The main advantage of trading using opposite Garda Diversified and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Diversified position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Garda Diversified vs. Scentre Group | Garda Diversified vs. Vicinity Centres Re | Garda Diversified vs. Charter Hall Retail | Garda Diversified vs. Cromwell Property Group |
| Westpac Banking vs. Navigator Global Investments | Westpac Banking vs. Hotel Property Investments | Westpac Banking vs. Garda Diversified Ppty | Westpac Banking vs. Australian United Investment |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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