Correlation Between Stelar Metals and Australia
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Australia 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 Stelar Metals and Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Australia and New, you can compare the effects of market volatilities on Stelar Metals and Australia 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 Stelar Metals with a short position of Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Australia.
Diversification Opportunities for Stelar Metals and Australia
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stelar and Australia is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Australia and New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australia and New and Stelar 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 Stelar Metals are associated (or correlated) with Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australia and New has no effect on the direction of Stelar Metals i.e., Stelar Metals and Australia go up and down completely randomly.
Pair Corralation between Stelar Metals and Australia
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Australia. In addition to that, Stelar Metals is 17.98 times more volatile than Australia and New. It trades about -0.06 of its total potential returns per unit of risk. Australia and New is currently generating about 0.15 per unit of volatility. If you would invest 10,416 in Australia and New on November 3, 2024 and sell it today you would earn a total of 54.00 from holding Australia and New or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Australia and New
Performance |
| Timeline |
| Stelar Metals |
| Australia and New |
Stelar Metals and Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Australia
The main advantage of trading using opposite Stelar Metals and Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Australia 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 Australia will offset losses from the drop in Australia's long position.| Stelar Metals vs. Phoslock Environmental Technologies | Stelar Metals vs. Qbe Insurance Group | Stelar Metals vs. Champion Iron | Stelar Metals vs. Tombador Iron |
| Australia vs. Ecofibre | Australia vs. iShares Global Healthcare | Australia vs. Australian Dairy Farms | Australia vs. Adriatic Metals Plc |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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