Correlation Between SEVEN GROUP and Wam Capital
Can any of the company-specific risk be diversified away by investing in both SEVEN GROUP and Wam Capital 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 Wam Capital 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 Wam Capital, you can compare the effects of market volatilities on SEVEN GROUP and Wam Capital 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 Wam Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEVEN GROUP and Wam Capital.
Diversification Opportunities for SEVEN GROUP and Wam Capital
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SEVEN and Wam is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding SEVEN GROUP HOLDINGS and Wam Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wam Capital 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 Wam Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wam Capital has no effect on the direction of SEVEN GROUP i.e., SEVEN GROUP and Wam Capital go up and down completely randomly.
Pair Corralation between SEVEN GROUP and Wam Capital
Assuming the 90 days trading horizon SEVEN GROUP HOLDINGS is expected to generate 1.94 times more return on investment than Wam Capital. However, SEVEN GROUP is 1.94 times more volatile than Wam Capital. It trades about 0.08 of its potential returns per unit of risk. Wam Capital is currently generating about 0.08 per unit of risk. If you would invest 3,451 in SEVEN GROUP HOLDINGS on November 1, 2024 and sell it today you would earn a total of 1,146 from holding SEVEN GROUP HOLDINGS or generate 33.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.21% |
| Values | Daily Returns |
SEVEN GROUP HOLDINGS vs. Wam Capital
Performance |
| Timeline |
| SEVEN GROUP HOLDINGS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Wam Capital |
SEVEN GROUP and Wam Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEVEN GROUP and Wam Capital
The main advantage of trading using opposite SEVEN GROUP and Wam Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEVEN GROUP position performs unexpectedly, Wam Capital 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 Wam Capital will offset losses from the drop in Wam Capital's long position.| SEVEN GROUP vs. Auswide Bank | SEVEN GROUP vs. Lykos Metals | SEVEN GROUP vs. FireFly Metals | SEVEN GROUP vs. Sky Metals |
| Wam Capital vs. Infomedia | Wam Capital vs. EROAD | Wam Capital vs. COAST ENTERTAINMENT HOLDINGS | Wam Capital vs. Truscott Mining Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |