Correlation Between Star Entertainment and Auswide Bank
Can any of the company-specific risk be diversified away by investing in both Star Entertainment and Auswide Bank 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 Star Entertainment and Auswide Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Entertainment Group and Auswide Bank, you can compare the effects of market volatilities on Star Entertainment and Auswide Bank 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 Star Entertainment with a short position of Auswide Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Entertainment and Auswide Bank.
Diversification Opportunities for Star Entertainment and Auswide Bank
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Star and Auswide is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Star Entertainment Group and Auswide Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auswide Bank and Star Entertainment 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 Star Entertainment Group are associated (or correlated) with Auswide Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auswide Bank has no effect on the direction of Star Entertainment i.e., Star Entertainment and Auswide Bank go up and down completely randomly.
Pair Corralation between Star Entertainment and Auswide Bank
Assuming the 90 days trading horizon Star Entertainment Group is expected to under-perform the Auswide Bank. In addition to that, Star Entertainment is 5.49 times more volatile than Auswide Bank. It trades about -0.17 of its total potential returns per unit of risk. Auswide Bank is currently generating about 0.1 per unit of volatility. If you would invest 470.00 in Auswide Bank on October 28, 2024 and sell it today you would earn a total of 17.00 from holding Auswide Bank or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Entertainment Group vs. Auswide Bank
Performance |
| Timeline |
| Star Entertainment |
| Auswide Bank |
Star Entertainment and Auswide Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Entertainment and Auswide Bank
The main advantage of trading using opposite Star Entertainment and Auswide Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Entertainment position performs unexpectedly, Auswide Bank 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 Auswide Bank will offset losses from the drop in Auswide Bank's long position.| Star Entertainment vs. M3 Mining | Star Entertainment vs. Energy Technologies Limited | Star Entertainment vs. Mach7 Technologies | Star Entertainment vs. Technology One |
| Auswide Bank vs. National Storage REIT | Auswide Bank vs. Viva Leisure | Auswide Bank vs. Sky Metals | Auswide Bank vs. Stelar Metals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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