Correlation Between Suncorp and Albion Resources
Can any of the company-specific risk be diversified away by investing in both Suncorp and Albion Resources 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 Suncorp and Albion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suncorp Group and Albion Resources Limited, you can compare the effects of market volatilities on Suncorp and Albion Resources 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 Suncorp with a short position of Albion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suncorp and Albion Resources.
Diversification Opportunities for Suncorp and Albion Resources
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Suncorp and Albion is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Suncorp Group and Albion Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albion Resources and Suncorp 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 Suncorp Group are associated (or correlated) with Albion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albion Resources has no effect on the direction of Suncorp i.e., Suncorp and Albion Resources go up and down completely randomly.
Pair Corralation between Suncorp and Albion Resources
Assuming the 90 days trading horizon Suncorp Group is expected to generate 0.64 times more return on investment than Albion Resources. However, Suncorp Group is 1.57 times less risky than Albion Resources. It trades about 0.11 of its potential returns per unit of risk. Albion Resources Limited is currently generating about -0.08 per unit of risk. If you would invest 1,930 in Suncorp Group on October 23, 2024 and sell it today you would earn a total of 38.00 from holding Suncorp Group or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Suncorp Group vs. Albion Resources Limited
Performance |
| Timeline |
| Suncorp Group |
| Albion Resources |
Suncorp and Albion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suncorp and Albion Resources
The main advantage of trading using opposite Suncorp and Albion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suncorp position performs unexpectedly, Albion Resources 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 Albion Resources will offset losses from the drop in Albion Resources' long position.| Suncorp vs. Hotel Property Investments | Suncorp vs. Bio Gene Technology | Suncorp vs. Dug Technology | Suncorp vs. Westpac Banking |
| Albion Resources vs. Globe Metals Mining | Albion Resources vs. Evolution Mining | Albion Resources vs. Computershare | Albion Resources vs. M3 Mining |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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