Correlation Between Legacy Iron and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Legacy Iron and Westpac Banking 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 Legacy Iron and Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legacy Iron Ore and Westpac Banking, you can compare the effects of market volatilities on Legacy Iron and Westpac Banking 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 Legacy Iron with a short position of Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legacy Iron and Westpac Banking.
Diversification Opportunities for Legacy Iron and Westpac Banking
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legacy and Westpac is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legacy Iron Ore and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking and Legacy Iron 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 Legacy Iron Ore are associated (or correlated) with Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Legacy Iron i.e., Legacy Iron and Westpac Banking go up and down completely randomly.
Pair Corralation between Legacy Iron and Westpac Banking
If you would invest (100.00) in Westpac Banking on September 5, 2024 and sell it today you would earn a total of 100.00 from holding Westpac Banking or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Legacy Iron Ore vs. Westpac Banking
Performance |
| Timeline |
| Legacy Iron Ore |
| Westpac Banking |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Legacy Iron and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legacy Iron and Westpac Banking
The main advantage of trading using opposite Legacy Iron and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legacy Iron position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Legacy Iron vs. Northern Star Resources | Legacy Iron vs. Evolution Mining | Legacy Iron vs. Bluescope Steel | Legacy Iron vs. Sandfire Resources NL |
| Westpac Banking vs. Talisman Mining | Westpac Banking vs. Black Rock Mining | Westpac Banking vs. Ironbark Capital | Westpac Banking vs. Charter Hall Retail |
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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