Correlation Between Hawsons Iron and Austal
Can any of the company-specific risk be diversified away by investing in both Hawsons Iron and Austal 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 Hawsons Iron and Austal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawsons Iron and Austal, you can compare the effects of market volatilities on Hawsons Iron and Austal 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 Hawsons Iron with a short position of Austal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawsons Iron and Austal.
Diversification Opportunities for Hawsons Iron and Austal
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hawsons and Austal is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hawsons Iron and Austal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austal and Hawsons Iron 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 Hawsons Iron are associated (or correlated) with Austal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austal has no effect on the direction of Hawsons Iron i.e., Hawsons Iron and Austal go up and down completely randomly.
Pair Corralation between Hawsons Iron and Austal
Assuming the 90 days trading horizon Hawsons Iron is expected to under-perform the Austal. In addition to that, Hawsons Iron is 1.76 times more volatile than Austal. It trades about -0.04 of its total potential returns per unit of risk. Austal is currently generating about 0.04 per unit of volatility. If you would invest 208.00 in Austal on September 4, 2024 and sell it today you would earn a total of 107.00 from holding Austal or generate 51.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hawsons Iron vs. Austal
Performance |
| Timeline |
| Hawsons Iron |
| Austal |
Hawsons Iron and Austal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawsons Iron and Austal
The main advantage of trading using opposite Hawsons Iron and Austal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawsons Iron position performs unexpectedly, Austal 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 Austal will offset losses from the drop in Austal's long position.| Hawsons Iron vs. Northern Star Resources | Hawsons Iron vs. Evolution Mining | Hawsons Iron vs. Bluescope Steel | Hawsons Iron vs. Sandfire Resources NL |
| Austal vs. Aneka Tambang Tbk | Austal vs. BHP Group Limited | Austal vs. Commonwealth Bank of | Austal 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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