Correlation Between Spirit Telecom and Ampol
Can any of the company-specific risk be diversified away by investing in both Spirit Telecom and Ampol 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 Spirit Telecom and Ampol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirit Telecom and Ampol, you can compare the effects of market volatilities on Spirit Telecom and Ampol 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 Spirit Telecom with a short position of Ampol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirit Telecom and Ampol.
Diversification Opportunities for Spirit Telecom and Ampol
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Spirit and Ampol is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Telecom and Ampol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampol and Spirit Telecom 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 Spirit Telecom are associated (or correlated) with Ampol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampol has no effect on the direction of Spirit Telecom i.e., Spirit Telecom and Ampol go up and down completely randomly.
Pair Corralation between Spirit Telecom and Ampol
Assuming the 90 days trading horizon Spirit Telecom is expected to generate 1.91 times more return on investment than Ampol. However, Spirit Telecom is 1.91 times more volatile than Ampol. It trades about 0.1 of its potential returns per unit of risk. Ampol is currently generating about -0.03 per unit of risk. If you would invest 52.00 in Spirit Telecom on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Spirit Telecom or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirit Telecom vs. Ampol
Performance |
| Timeline |
| Spirit Telecom |
| Ampol |
Spirit Telecom and Ampol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirit Telecom and Ampol
The main advantage of trading using opposite Spirit Telecom and Ampol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirit Telecom position performs unexpectedly, Ampol 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 Ampol will offset losses from the drop in Ampol's long position.| Spirit Telecom vs. Clime Investment Management | Spirit Telecom vs. Auctus Alternative Investments | Spirit Telecom vs. Pinnacle Investment Management | Spirit Telecom vs. K2 Asset Management |
| Ampol vs. Duxton Broadacre Farms | Ampol vs. Ironbark Capital | Ampol vs. Sandon Capital Investments | Ampol vs. Mirrabooka Investments |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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