Correlation Between G8 Education and Australian Unity
Can any of the company-specific risk be diversified away by investing in both G8 Education and Australian Unity 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 G8 Education and Australian Unity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G8 Education and Australian Unity Office, you can compare the effects of market volatilities on G8 Education and Australian Unity 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 G8 Education with a short position of Australian Unity. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 Education and Australian Unity.
Diversification Opportunities for G8 Education and Australian Unity
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between GEM and Australian is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding G8 Education and Australian Unity Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Unity Office and G8 Education 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 G8 Education are associated (or correlated) with Australian Unity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Unity Office has no effect on the direction of G8 Education i.e., G8 Education and Australian Unity go up and down completely randomly.
Pair Corralation between G8 Education and Australian Unity
Assuming the 90 days trading horizon G8 Education is expected to generate 0.86 times more return on investment than Australian Unity. However, G8 Education is 1.17 times less risky than Australian Unity. It trades about 0.05 of its potential returns per unit of risk. Australian Unity Office is currently generating about 0.0 per unit of risk. If you would invest 92.00 in G8 Education on August 30, 2024 and sell it today you would earn a total of 44.00 from holding G8 Education or generate 47.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G8 Education vs. Australian Unity Office
Performance |
| Timeline |
| G8 Education |
| Australian Unity Office |
G8 Education and Australian Unity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G8 Education and Australian Unity
The main advantage of trading using opposite G8 Education and Australian Unity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 Education position performs unexpectedly, Australian Unity 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 Australian Unity will offset losses from the drop in Australian Unity's long position.| G8 Education vs. Prodigy Gold NL | G8 Education vs. Enegex NL | G8 Education vs. Invex Therapeutics | G8 Education vs. Pointsbet Holdings |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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