Correlation Between Global Health and National Australia
Can any of the company-specific risk be diversified away by investing in both Global Health 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 Global Health and National Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Health and National Australia Bank, you can compare the effects of market volatilities on Global Health 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 Global Health with a short position of National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and National Australia.
Diversification Opportunities for Global Health and National Australia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Health 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 Global Health 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 Global Health 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 Global Health i.e., Global Health and National Australia go up and down completely randomly.
Pair Corralation between Global Health and National Australia
Assuming the 90 days trading horizon Global Health is expected to generate 13.26 times more return on investment than National Australia. However, Global Health is 13.26 times more volatile than National Australia Bank. It trades about 0.02 of its potential returns per unit of risk. National Australia Bank is currently generating about 0.05 per unit of risk. If you would invest 14.00 in Global Health on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Global Health or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Health vs. National Australia Bank
Performance |
| Timeline |
| Global Health |
| National Australia Bank |
Global Health and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Health and National Australia
The main advantage of trading using opposite Global Health and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health 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.| Global Health vs. oOhMedia | Global Health vs. Nine Entertainment Co | Global Health vs. WiseTech Global Limited | Global Health vs. Australian Agricultural |
| National Australia vs. Nine Entertainment Co | National Australia vs. Fisher Paykel Healthcare | National Australia vs. Ras Technology Holdings | National Australia vs. Computershare |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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