Correlation Between Indiana Resources and ANZ Group
Can any of the company-specific risk be diversified away by investing in both Indiana Resources and ANZ Group 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 Indiana Resources and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indiana Resources and ANZ Group Holdings, you can compare the effects of market volatilities on Indiana Resources and ANZ Group 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 Indiana Resources with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indiana Resources and ANZ Group.
Diversification Opportunities for Indiana Resources and ANZ Group
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indiana and ANZ is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Indiana Resources and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and Indiana Resources 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 Indiana Resources are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Indiana Resources i.e., Indiana Resources and ANZ Group go up and down completely randomly.
Pair Corralation between Indiana Resources and ANZ Group
Assuming the 90 days trading horizon Indiana Resources is expected to generate 7.05 times more return on investment than ANZ Group. However, Indiana Resources is 7.05 times more volatile than ANZ Group Holdings. It trades about 0.1 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about -0.14 per unit of risk. If you would invest 5.73 in Indiana Resources on September 14, 2024 and sell it today you would earn a total of 0.37 from holding Indiana Resources or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Indiana Resources vs. ANZ Group Holdings
Performance |
| Timeline |
| Indiana Resources |
| ANZ Group Holdings |
Indiana Resources and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indiana Resources and ANZ Group
The main advantage of trading using opposite Indiana Resources and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indiana Resources position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.| Indiana Resources vs. National Australia Bank | Indiana Resources vs. Bank of Queensland | Indiana Resources vs. Prime Financial Group | Indiana Resources vs. Finexia Financial Group |
| ANZ Group vs. Westpac Banking | ANZ Group vs. De Grey Mining | ANZ Group vs. Pointsbet Holdings | ANZ Group vs. Indiana Resources |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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