Correlation Between Pact Group and Australian Bond
Can any of the company-specific risk be diversified away by investing in both Pact Group and Australian Bond 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 Pact Group and Australian Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pact Group Holdings and Australian Bond Exchange, you can compare the effects of market volatilities on Pact Group and Australian Bond 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 Pact Group with a short position of Australian Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pact Group and Australian Bond.
Diversification Opportunities for Pact Group and Australian Bond
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pact and Australian is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Pact Group Holdings and Australian Bond Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Bond Exchange and Pact Group 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 Pact Group Holdings are associated (or correlated) with Australian Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Bond Exchange has no effect on the direction of Pact Group i.e., Pact Group and Australian Bond go up and down completely randomly.
Pair Corralation between Pact Group and Australian Bond
Assuming the 90 days trading horizon Pact Group Holdings is expected to generate 0.17 times more return on investment than Australian Bond. However, Pact Group Holdings is 5.81 times less risky than Australian Bond. It trades about 0.03 of its potential returns per unit of risk. Australian Bond Exchange is currently generating about 0.0 per unit of risk. If you would invest 70.00 in Pact Group Holdings on August 25, 2024 and sell it today you would earn a total of 10.00 from holding Pact Group Holdings or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pact Group Holdings vs. Australian Bond Exchange
Performance |
| Timeline |
| Pact Group Holdings |
| Australian Bond Exchange |
Pact Group and Australian Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pact Group and Australian Bond
The main advantage of trading using opposite Pact Group and Australian Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pact Group position performs unexpectedly, Australian Bond 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 Australian Bond will offset losses from the drop in Australian Bond's long position.| Pact Group vs. Medibank Private | Pact Group vs. Perpetual Credit Income | Pact Group vs. Finexia Financial Group | Pact Group vs. Carnegie Clean Energy |
| Australian Bond vs. Ecofibre | Australian Bond vs. iShares Global Healthcare | Australian Bond vs. Ridley | Australian Bond 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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