Correlation Between Home Consortium and Flagship Investments
Can any of the company-specific risk be diversified away by investing in both Home Consortium and Flagship Investments 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 Flagship Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Consortium and Flagship Investments, you can compare the effects of market volatilities on Home Consortium and Flagship Investments 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 Flagship Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Consortium and Flagship Investments.
Diversification Opportunities for Home Consortium and Flagship Investments
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Home and Flagship is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Home Consortium and Flagship Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagship Investments 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 Flagship Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagship Investments has no effect on the direction of Home Consortium i.e., Home Consortium and Flagship Investments go up and down completely randomly.
Pair Corralation between Home Consortium and Flagship Investments
Assuming the 90 days trading horizon Home Consortium is expected to generate 1.28 times more return on investment than Flagship Investments. However, Home Consortium is 1.28 times more volatile than Flagship Investments. It trades about 0.22 of its potential returns per unit of risk. Flagship Investments is currently generating about 0.09 per unit of risk. If you would invest 723.00 in Home Consortium on September 2, 2024 and sell it today you would earn a total of 510.00 from holding Home Consortium or generate 70.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Consortium vs. Flagship Investments
Performance |
| Timeline |
| Home Consortium |
| Flagship Investments |
Home Consortium and Flagship Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Consortium and Flagship Investments
The main advantage of trading using opposite Home Consortium and Flagship Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Consortium position performs unexpectedly, Flagship Investments 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 Flagship Investments will offset losses from the drop in Flagship Investments' long position.| Home Consortium vs. Scentre Group | Home Consortium vs. Vicinity Centres Re | Home Consortium vs. Charter Hall Retail | Home Consortium vs. Cromwell Property Group |
| Flagship Investments vs. Lendlease Group | Flagship Investments vs. Hutchison Telecommunications | Flagship Investments vs. BSP Financial Group | Flagship Investments vs. National Australia Bank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |