Correlation Between G8 Education and National Australia
Can any of the company-specific risk be diversified away by investing in both G8 Education 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 G8 Education and National Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G8 Education and National Australia Bank, you can compare the effects of market volatilities on G8 Education 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 G8 Education with a short position of National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 Education and National Australia.
Diversification Opportunities for G8 Education and National Australia
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between GEM and National is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding G8 Education 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 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 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 G8 Education i.e., G8 Education and National Australia go up and down completely randomly.
Pair Corralation between G8 Education and National Australia
Assuming the 90 days trading horizon G8 Education is expected to generate 4.63 times more return on investment than National Australia. However, G8 Education is 4.63 times more volatile than National Australia Bank. It trades about 0.08 of its potential returns per unit of risk. National Australia Bank is currently generating about 0.07 per unit of risk. If you would invest 96.00 in G8 Education on September 12, 2024 and sell it today you would earn a total of 40.00 from holding G8 Education or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G8 Education vs. National Australia Bank
Performance |
| Timeline |
| G8 Education |
| National Australia Bank |
G8 Education and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G8 Education and National Australia
The main advantage of trading using opposite G8 Education and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 Education 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.| G8 Education vs. Dexus Convenience Retail | G8 Education vs. Hutchison Telecommunications | G8 Education vs. Alternative Investment Trust | G8 Education vs. BKI Investment |
| National Australia vs. Sandon Capital Investments | National Australia vs. Microequities Asset Management | National Australia vs. Premier Investments | National Australia vs. Hutchison Telecommunications |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |