Correlation Between Perpetual Credit and Bank of Queensland
Can any of the company-specific risk be diversified away by investing in both Perpetual Credit and Bank of Queensland 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 Perpetual Credit and Bank of Queensland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perpetual Credit Income and Bank of Queensland, you can compare the effects of market volatilities on Perpetual Credit and Bank of Queensland 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 Perpetual Credit with a short position of Bank of Queensland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perpetual Credit and Bank of Queensland.
Diversification Opportunities for Perpetual Credit and Bank of Queensland
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Perpetual and Bank is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Perpetual Credit Income and Bank of Queensland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Queensland and Perpetual Credit 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 Perpetual Credit Income are associated (or correlated) with Bank of Queensland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Queensland has no effect on the direction of Perpetual Credit i.e., Perpetual Credit and Bank of Queensland go up and down completely randomly.
Pair Corralation between Perpetual Credit and Bank of Queensland
Assuming the 90 days trading horizon Perpetual Credit Income is expected to generate 5.15 times more return on investment than Bank of Queensland. However, Perpetual Credit is 5.15 times more volatile than Bank of Queensland. It trades about 0.07 of its potential returns per unit of risk. Bank of Queensland is currently generating about -0.06 per unit of risk. If you would invest 115.00 in Perpetual Credit Income on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Perpetual Credit Income or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perpetual Credit Income vs. Bank of Queensland
Performance |
| Timeline |
| Perpetual Credit Income |
| Bank of Queensland |
Perpetual Credit and Bank of Queensland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perpetual Credit and Bank of Queensland
The main advantage of trading using opposite Perpetual Credit and Bank of Queensland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perpetual Credit position performs unexpectedly, Bank of Queensland 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 Bank of Queensland will offset losses from the drop in Bank of Queensland's long position.| Perpetual Credit vs. ABACUS STORAGE KING | Perpetual Credit vs. Odyssey Energy | Perpetual Credit vs. Champion Iron | Perpetual Credit vs. Ridley |
| Bank of Queensland vs. Champion Iron | Bank of Queensland vs. Ridley | Bank of Queensland vs. Peel Mining | Bank of Queensland vs. Australian Dairy Farms |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |