Correlation Between Home Consortium and Austchina Holdings
Can any of the company-specific risk be diversified away by investing in both Home Consortium and Austchina Holdings 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 Home Consortium and Austchina Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Consortium and Austchina Holdings, you can compare the effects of market volatilities on Home Consortium and Austchina Holdings 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 Home Consortium with a short position of Austchina Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Consortium and Austchina Holdings.
Diversification Opportunities for Home Consortium and Austchina Holdings
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and Austchina is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Home Consortium and Austchina Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austchina Holdings and Home Consortium 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 Home Consortium are associated (or correlated) with Austchina Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austchina Holdings has no effect on the direction of Home Consortium i.e., Home Consortium and Austchina Holdings go up and down completely randomly.
Pair Corralation between Home Consortium and Austchina Holdings
Assuming the 90 days trading horizon Home Consortium is expected to generate 0.15 times more return on investment than Austchina Holdings. However, Home Consortium is 6.47 times less risky than Austchina Holdings. It trades about 0.16 of its potential returns per unit of risk. Austchina Holdings is currently generating about 0.02 per unit of risk. If you would invest 590.00 in Home Consortium on September 14, 2024 and sell it today you would earn a total of 625.00 from holding Home Consortium or generate 105.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Consortium vs. Austchina Holdings
Performance |
| Timeline |
| Home Consortium |
| Austchina Holdings |
Home Consortium and Austchina Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Consortium and Austchina Holdings
The main advantage of trading using opposite Home Consortium and Austchina Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Consortium position performs unexpectedly, Austchina Holdings 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 Austchina Holdings will offset losses from the drop in Austchina Holdings' long position.| Home Consortium vs. Bailador Technology Invest | Home Consortium vs. GreenX Metals | Home Consortium vs. Advanced Braking Technology | Home Consortium vs. Charter Hall Retail |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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