Correlation Between National Australia and Hub24
Can any of the company-specific risk be diversified away by investing in both National Australia and Hub24 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 Hub24 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 Hub24, you can compare the effects of market volatilities on National Australia and Hub24 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 Hub24. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Australia and Hub24.
Diversification Opportunities for National Australia and Hub24
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Hub24 is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding National Australia Bank and Hub24 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub24 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 Hub24. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub24 has no effect on the direction of National Australia i.e., National Australia and Hub24 go up and down completely randomly.
Pair Corralation between National Australia and Hub24
Assuming the 90 days trading horizon National Australia is expected to generate 14.01 times less return on investment than Hub24. But when comparing it to its historical volatility, National Australia Bank is 6.43 times less risky than Hub24. It trades about 0.06 of its potential returns per unit of risk. Hub24 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,489 in Hub24 on September 13, 2024 and sell it today you would earn a total of 4,521 from holding Hub24 or generate 181.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Australia Bank vs. Hub24
Performance |
| Timeline |
| National Australia Bank |
| Hub24 |
National Australia and Hub24 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Australia and Hub24
The main advantage of trading using opposite National Australia and Hub24 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Australia position performs unexpectedly, Hub24 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 Hub24 will offset losses from the drop in Hub24's long position.| National Australia vs. Data3 | National Australia vs. Global Data Centre | National Australia vs. Mount Gibson Iron | National Australia vs. Viva Leisure |
| Hub24 vs. Westpac Banking | Hub24 vs. National Australia Bank | Hub24 vs. National Australia Bank | Hub24 vs. National Australia Bank |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |