Correlation Between Green Technology and Auswide Bank
Can any of the company-specific risk be diversified away by investing in both Green Technology and Auswide Bank 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 Green Technology and Auswide Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Technology Metals and Auswide Bank, you can compare the effects of market volatilities on Green Technology and Auswide Bank 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 Green Technology with a short position of Auswide Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Technology and Auswide Bank.
Diversification Opportunities for Green Technology and Auswide Bank
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Green and Auswide is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Green Technology Metals and Auswide Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auswide Bank and Green Technology 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 Green Technology Metals are associated (or correlated) with Auswide Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auswide Bank has no effect on the direction of Green Technology i.e., Green Technology and Auswide Bank go up and down completely randomly.
Pair Corralation between Green Technology and Auswide Bank
Assuming the 90 days trading horizon Green Technology Metals is expected to under-perform the Auswide Bank. In addition to that, Green Technology is 3.74 times more volatile than Auswide Bank. It trades about -0.09 of its total potential returns per unit of risk. Auswide Bank is currently generating about -0.01 per unit of volatility. If you would invest 503.00 in Auswide Bank on August 25, 2024 and sell it today you would lose (63.00) from holding Auswide Bank or give up 12.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Technology Metals vs. Auswide Bank
Performance |
| Timeline |
| Green Technology Metals |
| Auswide Bank |
Green Technology and Auswide Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Technology and Auswide Bank
The main advantage of trading using opposite Green Technology and Auswide Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Technology position performs unexpectedly, Auswide Bank 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 Auswide Bank will offset losses from the drop in Auswide Bank's long position.| Green Technology vs. Auswide Bank | Green Technology vs. MotorCycle Holdings | Green Technology vs. Lendlease Group | Green Technology vs. Westpac Banking |
| Auswide Bank vs. Aneka Tambang Tbk | Auswide Bank vs. BHP Group Limited | Auswide Bank vs. Commonwealth Bank of | Auswide Bank vs. Commonwealth Bank of |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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