Correlation Between State Bank and AUST AGRICULTURAL
Can any of the company-specific risk be diversified away by investing in both State Bank and AUST AGRICULTURAL 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 State Bank and AUST AGRICULTURAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and AUST AGRICULTURAL, you can compare the effects of market volatilities on State Bank and AUST AGRICULTURAL 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 State Bank with a short position of AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and AUST AGRICULTURAL.
Diversification Opportunities for State Bank and AUST AGRICULTURAL
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between State and AUST is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL and State Bank 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 State Bank of are associated (or correlated) with AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of State Bank i.e., State Bank and AUST AGRICULTURAL go up and down completely randomly.
Pair Corralation between State Bank and AUST AGRICULTURAL
Assuming the 90 days horizon State Bank of is expected to generate 1.59 times more return on investment than AUST AGRICULTURAL. However, State Bank is 1.59 times more volatile than AUST AGRICULTURAL. It trades about 0.14 of its potential returns per unit of risk. AUST AGRICULTURAL is currently generating about -0.05 per unit of risk. If you would invest 9,050 in State Bank of on September 19, 2024 and sell it today you would earn a total of 400.00 from holding State Bank of or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. AUST AGRICULTURAL
Performance |
| Timeline |
| State Bank |
| AUST AGRICULTURAL |
State Bank and AUST AGRICULTURAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and AUST AGRICULTURAL
The main advantage of trading using opposite State Bank and AUST AGRICULTURAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, AUST AGRICULTURAL 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 AUST AGRICULTURAL will offset losses from the drop in AUST AGRICULTURAL's long position.| State Bank vs. Gamma Communications plc | State Bank vs. Nufarm Limited | State Bank vs. Highlight Communications AG | State Bank vs. Daito Trust Construction |
| AUST AGRICULTURAL vs. PROSIEBENSAT1 MEDIADR4 | AUST AGRICULTURAL vs. Playtech plc | AUST AGRICULTURAL vs. LG Display Co | AUST AGRICULTURAL vs. Tencent Music Entertainment |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |