Correlation Between Sky Metals and Australian Unity
Can any of the company-specific risk be diversified away by investing in both Sky Metals and Australian Unity 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 Australian Unity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sky Metals and Australian Unity Office, you can compare the effects of market volatilities on Sky Metals and Australian Unity 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 Australian Unity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky Metals and Australian Unity.
Diversification Opportunities for Sky Metals and Australian Unity
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sky and Australian is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sky Metals and Australian Unity Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Unity Office 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 Australian Unity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Unity Office has no effect on the direction of Sky Metals i.e., Sky Metals and Australian Unity go up and down completely randomly.
Pair Corralation between Sky Metals and Australian Unity
Assuming the 90 days trading horizon Sky Metals is expected to generate 3.46 times more return on investment than Australian Unity. However, Sky Metals is 3.46 times more volatile than Australian Unity Office. It trades about 0.13 of its potential returns per unit of risk. Australian Unity Office is currently generating about -0.04 per unit of risk. If you would invest 3.00 in Sky Metals on October 25, 2024 and sell it today you would earn a total of 2.40 from holding Sky Metals or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sky Metals vs. Australian Unity Office
Performance |
| Timeline |
| Sky Metals |
| Australian Unity Office |
Sky Metals and Australian Unity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sky Metals and Australian Unity
The main advantage of trading using opposite Sky Metals and Australian Unity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky Metals position performs unexpectedly, Australian Unity 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 Australian Unity will offset losses from the drop in Australian Unity's long position.| Sky Metals vs. Northern Star Resources | Sky Metals vs. Evolution Mining | Sky Metals vs. Bluescope Steel | Sky Metals vs. De Grey Mining |
| Australian Unity vs. Phoslock Environmental Technologies | Australian Unity vs. Mount Gibson Iron | Australian Unity vs. ABACUS STORAGE KING | Australian Unity vs. Tombador 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |