Correlation Between Stelar Metals and Bank of Queensland
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Bank of Queensland 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 Bank of Queensland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Bank of Queensland, you can compare the effects of market volatilities on Stelar Metals and Bank of Queensland 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 Bank of Queensland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Bank of Queensland.
Diversification Opportunities for Stelar Metals and Bank of Queensland
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stelar and Bank is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Bank of Queensland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Queensland 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 Bank of Queensland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Queensland has no effect on the direction of Stelar Metals i.e., Stelar Metals and Bank of Queensland go up and down completely randomly.
Pair Corralation between Stelar Metals and Bank of Queensland
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Bank of Queensland. In addition to that, Stelar Metals is 12.9 times more volatile than Bank of Queensland. It trades about -0.29 of its total potential returns per unit of risk. Bank of Queensland is currently generating about -0.01 per unit of volatility. If you would invest 10,540 in Bank of Queensland on August 29, 2024 and sell it today you would lose (8.00) from holding Bank of Queensland or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Bank of Queensland
Performance |
| Timeline |
| Stelar Metals |
| Bank of Queensland |
Stelar Metals and Bank of Queensland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Bank of Queensland
The main advantage of trading using opposite Stelar Metals and Bank of Queensland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Bank of Queensland 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 Bank of Queensland will offset losses from the drop in Bank of Queensland's long position.| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
| Bank of Queensland vs. Mystate | Bank of Queensland vs. Insurance Australia Group | Bank of Queensland vs. Origin Energy | Bank of Queensland vs. Ecofibre |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |