Correlation Between Premier Investments and ANZ Group
Can any of the company-specific risk be diversified away by investing in both Premier Investments and ANZ Group 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 Premier Investments and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Investments and ANZ Group Holdings, you can compare the effects of market volatilities on Premier Investments and ANZ Group 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 Premier Investments with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Investments and ANZ Group.
Diversification Opportunities for Premier Investments and ANZ Group
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Premier and ANZ is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Premier Investments and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and Premier Investments 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 Premier Investments are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Premier Investments i.e., Premier Investments and ANZ Group go up and down completely randomly.
Pair Corralation between Premier Investments and ANZ Group
Assuming the 90 days trading horizon Premier Investments is expected to generate 6.22 times more return on investment than ANZ Group. However, Premier Investments is 6.22 times more volatile than ANZ Group Holdings. It trades about 0.09 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about -0.1 per unit of risk. If you would invest 3,375 in Premier Investments on September 1, 2024 and sell it today you would earn a total of 94.00 from holding Premier Investments or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Premier Investments vs. ANZ Group Holdings
Performance |
| Timeline |
| Premier Investments |
| ANZ Group Holdings |
Premier Investments and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Investments and ANZ Group
The main advantage of trading using opposite Premier Investments and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Investments position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.| Premier Investments vs. Aneka Tambang Tbk | Premier Investments vs. BHP Group Limited | Premier Investments vs. Rio Tinto | Premier Investments vs. Macquarie Group Ltd |
| ANZ Group vs. Regal Investment | ANZ Group vs. Premier Investments | ANZ Group vs. Navigator Global Investments | ANZ Group 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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