Correlation Between Sky Metals and ANZ Group
Can any of the company-specific risk be diversified away by investing in both Sky Metals 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 Sky Metals and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sky Metals and ANZ Group Holdings, you can compare the effects of market volatilities on Sky Metals 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 Sky Metals with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky Metals and ANZ Group.
Diversification Opportunities for Sky Metals and ANZ Group
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sky and ANZ is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sky Metals 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 Sky Metals 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 Sky Metals 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 Sky Metals i.e., Sky Metals and ANZ Group go up and down completely randomly.
Pair Corralation between Sky Metals and ANZ Group
Assuming the 90 days trading horizon Sky Metals is expected to under-perform the ANZ Group. In addition to that, Sky Metals is 20.01 times more volatile than ANZ Group Holdings. It trades about -0.06 of its total potential returns per unit of risk. ANZ Group Holdings is currently generating about -0.07 per unit of volatility. If you would invest 10,373 in ANZ Group Holdings on August 25, 2024 and sell it today you would lose (36.00) from holding ANZ Group Holdings or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sky Metals vs. ANZ Group Holdings
Performance |
| Timeline |
| Sky Metals |
| ANZ Group Holdings |
Sky Metals and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sky Metals and ANZ Group
The main advantage of trading using opposite Sky Metals and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky Metals 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.| Sky Metals vs. Northern Star Resources | Sky Metals vs. Evolution Mining | Sky Metals vs. Aneka Tambang Tbk | Sky Metals vs. De Grey Mining |
| ANZ Group vs. ACDC Metals | ANZ Group vs. Sky Metals | ANZ Group vs. Aurelia Metals | ANZ Group vs. Patriot Battery 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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