Correlation Between National Australia and TTG Fintech
Can any of the company-specific risk be diversified away by investing in both National Australia and TTG Fintech 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 National Australia and TTG Fintech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Australia Bank and TTG Fintech, you can compare the effects of market volatilities on National Australia and TTG Fintech 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 National Australia with a short position of TTG Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Australia and TTG Fintech.
Diversification Opportunities for National Australia and TTG Fintech
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and TTG is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding National Australia Bank and TTG Fintech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTG Fintech and National Australia 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 National Australia Bank are associated (or correlated) with TTG Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTG Fintech has no effect on the direction of National Australia i.e., National Australia and TTG Fintech go up and down completely randomly.
Pair Corralation between National Australia and TTG Fintech
Assuming the 90 days trading horizon National Australia Bank is expected to generate 0.3 times more return on investment than TTG Fintech. However, National Australia Bank is 3.38 times less risky than TTG Fintech. It trades about -0.13 of its potential returns per unit of risk. TTG Fintech is currently generating about -0.21 per unit of risk. If you would invest 3,880 in National Australia Bank on September 13, 2024 and sell it today you would lose (121.00) from holding National Australia Bank or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Australia Bank vs. TTG Fintech
Performance |
| Timeline |
| National Australia Bank |
| TTG Fintech |
National Australia and TTG Fintech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Australia and TTG Fintech
The main advantage of trading using opposite National Australia and TTG Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Australia position performs unexpectedly, TTG Fintech 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 TTG Fintech will offset losses from the drop in TTG Fintech's long position.| National Australia vs. Charter Hall Retail | National Australia vs. Gold Road Resources | National Australia vs. Saferoads Holdings | National Australia vs. Hansen Technologies |
| TTG Fintech vs. BKI Investment | TTG Fintech vs. Diversified United Investment | TTG Fintech vs. Sandon Capital Investments | TTG Fintech vs. Queste Communications |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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