Correlation Between TPG Telecom and Auswide Bank
Can any of the company-specific risk be diversified away by investing in both TPG Telecom and Auswide Bank 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 TPG Telecom and Auswide Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPG Telecom and Auswide Bank, you can compare the effects of market volatilities on TPG Telecom and Auswide Bank 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 TPG Telecom with a short position of Auswide Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG Telecom and Auswide Bank.
Diversification Opportunities for TPG Telecom and Auswide Bank
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TPG and Auswide is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding TPG Telecom and Auswide Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auswide Bank and TPG 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 TPG Telecom are associated (or correlated) with Auswide Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auswide Bank has no effect on the direction of TPG Telecom i.e., TPG Telecom and Auswide Bank go up and down completely randomly.
Pair Corralation between TPG Telecom and Auswide Bank
Assuming the 90 days trading horizon TPG Telecom is expected to generate 23.9 times less return on investment than Auswide Bank. But when comparing it to its historical volatility, TPG Telecom is 1.23 times less risky than Auswide Bank. It trades about 0.0 of its potential returns per unit of risk. Auswide Bank is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 394.00 in Auswide Bank on August 30, 2024 and sell it today you would earn a total of 56.00 from holding Auswide Bank or generate 14.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPG Telecom vs. Auswide Bank
Performance |
| Timeline |
| TPG Telecom |
| Auswide Bank |
TPG Telecom and Auswide Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPG Telecom and Auswide Bank
The main advantage of trading using opposite TPG Telecom and Auswide Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPG Telecom position performs unexpectedly, Auswide Bank 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 Auswide Bank will offset losses from the drop in Auswide Bank's long position.| TPG Telecom vs. Tlou Energy | TPG Telecom vs. Encounter Resources | TPG Telecom vs. Southern Cross Gold | TPG Telecom vs. Minbos Resources |
| Auswide Bank vs. Aneka Tambang Tbk | Auswide Bank vs. BHP Group Limited | Auswide Bank vs. Commonwealth Bank | Auswide Bank vs. Commonwealth Bank of |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |