Correlation Between Leeuwin Metals and National Australia
Can any of the company-specific risk be diversified away by investing in both Leeuwin Metals and National Australia 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 Leeuwin Metals and National Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leeuwin Metals and National Australia Bank, you can compare the effects of market volatilities on Leeuwin Metals and National Australia 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 Leeuwin Metals with a short position of National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leeuwin Metals and National Australia.
Diversification Opportunities for Leeuwin Metals and National Australia
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Leeuwin and National is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Leeuwin Metals and National Australia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Australia Bank and Leeuwin Metals 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 Leeuwin Metals are associated (or correlated) with National Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Australia Bank has no effect on the direction of Leeuwin Metals i.e., Leeuwin Metals and National Australia go up and down completely randomly.
Pair Corralation between Leeuwin Metals and National Australia
Assuming the 90 days trading horizon Leeuwin Metals is expected to under-perform the National Australia. In addition to that, Leeuwin Metals is 14.84 times more volatile than National Australia Bank. It trades about -0.04 of its total potential returns per unit of risk. National Australia Bank is currently generating about 0.08 per unit of volatility. If you would invest 9,503 in National Australia Bank on September 4, 2024 and sell it today you would earn a total of 1,116 from holding National Australia Bank or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Leeuwin Metals vs. National Australia Bank
Performance |
| Timeline |
| Leeuwin Metals |
| National Australia Bank |
Leeuwin Metals and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leeuwin Metals and National Australia
The main advantage of trading using opposite Leeuwin Metals and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leeuwin Metals position performs unexpectedly, National Australia 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 National Australia will offset losses from the drop in National Australia's long position.| Leeuwin Metals vs. Northern Star Resources | Leeuwin Metals vs. Evolution Mining | Leeuwin Metals vs. Bluescope Steel | Leeuwin Metals vs. Sandfire Resources NL |
| National Australia vs. Ainsworth Game Technology | National Australia vs. Medical Developments International | National Australia vs. Autosports Group | National Australia vs. Bisalloy Steel Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |