Correlation Between Southern Cross and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Southern Cross 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 Southern Cross and Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Cross Media and Westpac Banking, you can compare the effects of market volatilities on Southern Cross 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 Southern Cross with a short position of Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Cross and Westpac Banking.
Diversification Opportunities for Southern Cross and Westpac Banking
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southern and Westpac is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Southern Cross Media and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking and Southern Cross 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 Southern Cross Media 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 has no effect on the direction of Southern Cross i.e., Southern Cross and Westpac Banking go up and down completely randomly.
Pair Corralation between Southern Cross and Westpac Banking
If you would invest 50.00 in Southern Cross Media on October 25, 2024 and sell it today you would earn a total of 10.00 from holding Southern Cross Media or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Cross Media vs. Westpac Banking
Performance |
| Timeline |
| Southern Cross Media |
| Westpac Banking |
Southern Cross and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Cross and Westpac Banking
The main advantage of trading using opposite Southern Cross and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Cross 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.| Southern Cross vs. Tombador Iron | Southern Cross vs. Pure Foods Tasmania | Southern Cross vs. Iron Road | Southern Cross vs. De Grey Mining |
| Westpac Banking vs. Australian Unity Office | Westpac Banking vs. Home Consortium | Westpac Banking vs. Readytech Holdings | Westpac Banking vs. Southern Cross Media |
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 Stocks Directory module to find actively traded stocks across global markets.
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