Correlation Between Sandon Capital and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Sandon Capital and Westpac Banking 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 Sandon Capital and Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sandon Capital Investments and Westpac Banking Corp, you can compare the effects of market volatilities on Sandon Capital and Westpac Banking 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 Sandon Capital with a short position of Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandon Capital and Westpac Banking.
Diversification Opportunities for Sandon Capital and Westpac Banking
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sandon and Westpac is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sandon Capital Investments and Westpac Banking Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking Corp and Sandon Capital 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 Sandon Capital Investments are associated (or correlated) with Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking Corp has no effect on the direction of Sandon Capital i.e., Sandon Capital and Westpac Banking go up and down completely randomly.
Pair Corralation between Sandon Capital and Westpac Banking
Assuming the 90 days trading horizon Sandon Capital is expected to generate 96.4 times less return on investment than Westpac Banking. But when comparing it to its historical volatility, Sandon Capital Investments is 1.28 times less risky than Westpac Banking. It trades about 0.0 of its potential returns per unit of risk. Westpac Banking Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3,134 in Westpac Banking Corp on September 2, 2024 and sell it today you would earn a total of 202.00 from holding Westpac Banking Corp or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandon Capital Investments vs. Westpac Banking Corp
Performance |
| Timeline |
| Sandon Capital Inves |
| Westpac Banking Corp |
Sandon Capital and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandon Capital and Westpac Banking
The main advantage of trading using opposite Sandon Capital and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandon Capital position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Sandon Capital vs. Super Retail Group | Sandon Capital vs. Flagship Investments | Sandon Capital vs. Aspire Mining | Sandon Capital vs. Truscott Mining Corp |
| Westpac Banking vs. Sandon Capital Investments | Westpac Banking vs. Flagship Investments | Westpac Banking vs. Regal Investment | Westpac Banking vs. Ras Technology Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |