Correlation Between IShares Global and Austral Gold
Can any of the company-specific risk be diversified away by investing in both IShares Global and Austral Gold 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 IShares Global and Austral Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Healthcare and Austral Gold, you can compare the effects of market volatilities on IShares Global and Austral Gold 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 IShares Global with a short position of Austral Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Austral Gold.
Diversification Opportunities for IShares Global and Austral Gold
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and Austral is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Healthcare and Austral Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austral Gold and IShares Global 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 iShares Global Healthcare are associated (or correlated) with Austral Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austral Gold has no effect on the direction of IShares Global i.e., IShares Global and Austral Gold go up and down completely randomly.
Pair Corralation between IShares Global and Austral Gold
Assuming the 90 days trading horizon iShares Global Healthcare is expected to under-perform the Austral Gold. But the etf apears to be less risky and, when comparing its historical volatility, iShares Global Healthcare is 8.45 times less risky than Austral Gold. The etf trades about -0.18 of its potential returns per unit of risk. The Austral Gold is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2.40 in Austral Gold on August 27, 2024 and sell it today you would lose (0.10) from holding Austral Gold or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Healthcare vs. Austral Gold
Performance |
| Timeline |
| iShares Global Healthcare |
| Austral Gold |
IShares Global and Austral Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and Austral Gold
The main advantage of trading using opposite IShares Global and Austral Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, Austral Gold 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 Austral Gold will offset losses from the drop in Austral Gold's long position.| IShares Global vs. BetaShares Global Government | IShares Global vs. BetaShares Geared Australian | IShares Global vs. Global X Semiconductor | IShares Global vs. iShares UBS Government |
| Austral Gold vs. Northern Star Resources | Austral Gold vs. Evolution Mining | Austral Gold vs. Bluescope Steel | Austral Gold vs. Sandfire Resources NL |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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