Correlation Between Prodigy Gold and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Prodigy Gold and Westpac Banking 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 Prodigy Gold and Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prodigy Gold NL and Westpac Banking, you can compare the effects of market volatilities on Prodigy Gold and Westpac Banking 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 Prodigy Gold with a short position of Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prodigy Gold and Westpac Banking.
Diversification Opportunities for Prodigy Gold and Westpac Banking
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prodigy and Westpac is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prodigy Gold NL and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking and Prodigy Gold 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 Prodigy Gold NL are associated (or correlated) with Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Prodigy Gold i.e., Prodigy Gold and Westpac Banking go up and down completely randomly.
Pair Corralation between Prodigy Gold and Westpac Banking
Assuming the 90 days trading horizon Prodigy Gold NL is expected to generate 220.87 times more return on investment than Westpac Banking. However, Prodigy Gold is 220.87 times more volatile than Westpac Banking. It trades about 0.07 of its potential returns per unit of risk. Westpac Banking is currently generating about 0.11 per unit of risk. If you would invest 0.30 in Prodigy Gold NL on September 12, 2024 and sell it today you would lose (0.10) from holding Prodigy Gold NL or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prodigy Gold NL vs. Westpac Banking
Performance |
| Timeline |
| Prodigy Gold NL |
| Westpac Banking |
Prodigy Gold and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prodigy Gold and Westpac Banking
The main advantage of trading using opposite Prodigy Gold and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prodigy Gold position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Prodigy Gold vs. Wt Financial Group | Prodigy Gold vs. Collins Foods | Prodigy Gold vs. Prime Financial Group | Prodigy Gold vs. My Foodie Box |
| Westpac Banking vs. Aeon Metals | Westpac Banking vs. Ironbark Capital | Westpac Banking vs. Red Hill Iron | Westpac Banking vs. Hawsons Iron |
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 Stocks Directory module to find actively traded stocks across global markets.
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