Correlation Between SEVEN GROUP and ABACUS STORAGE
Can any of the company-specific risk be diversified away by investing in both SEVEN GROUP and ABACUS STORAGE 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 SEVEN GROUP and ABACUS STORAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEVEN GROUP HOLDINGS and ABACUS STORAGE KING, you can compare the effects of market volatilities on SEVEN GROUP and ABACUS STORAGE 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 SEVEN GROUP with a short position of ABACUS STORAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEVEN GROUP and ABACUS STORAGE.
Diversification Opportunities for SEVEN GROUP and ABACUS STORAGE
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SEVEN and ABACUS is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding SEVEN GROUP HOLDINGS and ABACUS STORAGE KING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABACUS STORAGE KING and SEVEN GROUP 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 SEVEN GROUP HOLDINGS are associated (or correlated) with ABACUS STORAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABACUS STORAGE KING has no effect on the direction of SEVEN GROUP i.e., SEVEN GROUP and ABACUS STORAGE go up and down completely randomly.
Pair Corralation between SEVEN GROUP and ABACUS STORAGE
Assuming the 90 days trading horizon SEVEN GROUP HOLDINGS is expected to generate 0.53 times more return on investment than ABACUS STORAGE. However, SEVEN GROUP HOLDINGS is 1.9 times less risky than ABACUS STORAGE. It trades about 0.13 of its potential returns per unit of risk. ABACUS STORAGE KING is currently generating about 0.01 per unit of risk. If you would invest 4,491 in SEVEN GROUP HOLDINGS on October 21, 2024 and sell it today you would earn a total of 106.00 from holding SEVEN GROUP HOLDINGS or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEVEN GROUP HOLDINGS vs. ABACUS STORAGE KING
Performance |
| Timeline |
| SEVEN GROUP HOLDINGS |
| ABACUS STORAGE KING |
SEVEN GROUP and ABACUS STORAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEVEN GROUP and ABACUS STORAGE
The main advantage of trading using opposite SEVEN GROUP and ABACUS STORAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEVEN GROUP position performs unexpectedly, ABACUS STORAGE 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 ABACUS STORAGE will offset losses from the drop in ABACUS STORAGE's long position.| SEVEN GROUP vs. Macquarie Group | SEVEN GROUP vs. Macquarie Group Ltd | SEVEN GROUP vs. Commonwealth Bank | SEVEN GROUP vs. Rio Tinto |
| ABACUS STORAGE vs. COAST ENTERTAINMENT HOLDINGS | ABACUS STORAGE vs. Seven West Media | ABACUS STORAGE vs. Health and Plant | ABACUS STORAGE vs. Healthco Healthcare and |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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