Correlation Between Ironbark Capital and Acrow
Can any of the company-specific risk be diversified away by investing in both Ironbark Capital and Acrow 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 Ironbark Capital and Acrow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ironbark Capital and Acrow Limited, you can compare the effects of market volatilities on Ironbark Capital and Acrow 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 Ironbark Capital with a short position of Acrow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ironbark Capital and Acrow.
Diversification Opportunities for Ironbark Capital and Acrow
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ironbark and Acrow is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ironbark Capital and Acrow Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acrow Limited and Ironbark Capital 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 Ironbark Capital are associated (or correlated) with Acrow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acrow Limited has no effect on the direction of Ironbark Capital i.e., Ironbark Capital and Acrow go up and down completely randomly.
Pair Corralation between Ironbark Capital and Acrow
Assuming the 90 days trading horizon Ironbark Capital is expected to generate 123.92 times less return on investment than Acrow. But when comparing it to its historical volatility, Ironbark Capital is 1.36 times less risky than Acrow. It trades about 0.0 of its potential returns per unit of risk. Acrow Limited is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 105.00 in Acrow Limited on October 24, 2024 and sell it today you would earn a total of 6.00 from holding Acrow Limited or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ironbark Capital vs. Acrow Limited
Performance |
| Timeline |
| Ironbark Capital |
| Acrow Limited |
Ironbark Capital and Acrow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ironbark Capital and Acrow
The main advantage of trading using opposite Ironbark Capital and Acrow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ironbark Capital position performs unexpectedly, Acrow 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 Acrow will offset losses from the drop in Acrow's long position.| Ironbark Capital vs. Truscott Mining Corp | Ironbark Capital vs. Retail Food Group | Ironbark Capital vs. Centaurus Metals | Ironbark Capital vs. Super Retail Group |
| Acrow vs. Neurotech International | Acrow vs. Ainsworth Game Technology | Acrow vs. Sonic Healthcare | Acrow vs. Technology One |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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