Correlation Between Nanosonics and CSL
Can any of the company-specific risk be diversified away by investing in both Nanosonics and CSL 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 Nanosonics and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanosonics and CSL, you can compare the effects of market volatilities on Nanosonics and CSL 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 Nanosonics with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanosonics and CSL.
Diversification Opportunities for Nanosonics and CSL
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanosonics and CSL is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nanosonics and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL and Nanosonics 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 Nanosonics are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Nanosonics i.e., Nanosonics and CSL go up and down completely randomly.
Pair Corralation between Nanosonics and CSL
Assuming the 90 days trading horizon Nanosonics is expected to under-perform the CSL. In addition to that, Nanosonics is 2.19 times more volatile than CSL. It trades about -0.16 of its total potential returns per unit of risk. CSL is currently generating about -0.11 per unit of volatility. If you would invest 28,666 in CSL on September 13, 2024 and sell it today you would lose (705.00) from holding CSL or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nanosonics vs. CSL
Performance |
| Timeline |
| Nanosonics |
| CSL |
Nanosonics and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanosonics and CSL
The main advantage of trading using opposite Nanosonics and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanosonics position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Nanosonics vs. Macquarie Group | Nanosonics vs. Rio Tinto | Nanosonics vs. CSL | Nanosonics vs. Commonwealth Bank of |
| CSL vs. Charter Hall Education | CSL vs. Ainsworth Game Technology | CSL vs. Advanced Braking Technology | CSL vs. Pinnacle Investment Management |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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